Cash App, which launched in 2017 as a mobile payment app for the unbanked, has been growing quickly since then — it now serves millions of users worldwide, according to TechCrunch.
You can send payments or request funds from anyone using their phone number, email address, or username, and they don't need an account either. The service even offers peer-to-peer lending products that allow people to borrow money from one another directly. (It also allows companies to raise capital via equity crowdfunding.)
For many years before it existed, I used Venmo to handle all my transactions. It was easy to set up accounts, connect your bank info, and manage who could see what. But there were some drawbacks too. For example, if someone wanted me to transfer them money over text message and I didn't have my wallet with me, they couldn't just ask me to do so because I had no way of sending them cash without having my physical debit card.
I've always felt like Cash App solves this problem by allowing users to create virtual wallets. You can link multiple credit cards to your profile, add extra storage space for emergency funds, and enable two-factor authentication wherever possible. It works exactly like PayPal, but unlike other services such as Venmo where most of your transaction history remains public, everything related to your Cash App balance stays private unless you want it to be shared.
But what about the fact that the company only takes 2 percent per trade? How will it ever be able to turn enough profit to make any kind of impactful changes? And is the lack of fees really worth giving up valuable data points to help build user profiles? Asking those questions might seem absurd since the company isn't doing anything inherently bad, but we still feel compelled to scrutinize every aspect of this new digital platform.
So let's start off by asking ourselves something basic: Does Cash App actually work?
"We're not a financial institution," Cash App spokesperson Emily Baukes told us when asked about whether the company generates income from users' balances. "What we are is a technology solution." In other words, while it may look like an app designed to facilitate monetary exchanges between friends and family members, it doesn't technically operate as a banking tool.
Instead, the company makes money by charging merchants anywhere from 1% to 3%, depending on which product they choose to sell. This means that as long as you aren't trying to withdraw large amounts of money at once, the fees shouldn't affect you much. When I sent $100 to my friend in New York City last week, it cost me nothing.
The fee structure also differs based on each country's currency exchange rates. If you live in Ireland, for example, you'll end up paying less than if you reside somewhere else. Cash App splits revenue 50/50 between itself and participating businesses.
Another advantage of relying solely on third parties is that Cash App doesn't require customers to submit sensitive information like social security numbers or birthdates. Instead, the company uses algorithms to determine risk levels and generate customer profiles. All of this happens behind closed doors.
If you think about it, Cash App's approach is similar to Square's strategy for making money. Both platforms charge small percentages to sellers who accept payments via smartphone apps instead of going straight into consumers' checking accounts. While both services offer free versions of their apps, the real value comes from upgrading to the premium version, which costs significantly less than traditional banks.
Square handles things differently though. By partnering with major retailers, including Starbucks, Chipotle, Sephora, Macy's, 7-Eleven, GameStop, Dollar General, PetSmart, Chili's, Jamba Juice, Papa Murphy's Pizza, and others, the company charges these brands anywhere from 20 cents to 30 cents per sale made using Square point-of-sale devices. That percentage goes towards covering the processing fees associated with running the ecommerce tools provided by the partners.
According to the Wall Street Journal, Square reported nearly $2 billion in annualized sales during Q3 2019 alone. These figures come out to roughly $800 million in quarterly net income after expenses.
While Cash App hasn't released full earnings reports yet, the company did report $1.5 billion in total deposits during the fourth quarter of 2018. Assuming that figure holds steady throughout fiscal year 2020, the company should bring in around $4.8 billion in profits annually. On top of that, it plans to launch several new products in the future.
Given that Cash App's primary goal is to serve people who otherwise wouldn't qualify for loans, it seems likely that the company would take a cut of transactions involving larger sums of money. However, the company says its policies won't change regardless of whether the amount being exchanged is big bucks or little ones.
As far as safety goes, Cash App follows pretty standard online practices. Like Facebook Messenger and WhatsApp, the company encrypts messages prior to transmitting them across networks, meaning nobody except the recipient gets access to the content within. Your personal details never leave your device; rather, they stay safely tucked away inside your app.
When dealing with outside vendors, however, Cash App requires additional verification steps. To ensure that no unauthorized individuals try to abuse the system, the company sends out codes that must be entered whenever a purchase is made.
In addition to verifying identities themselves, the company also checks to confirm that buyers have valid government identification documents available. Users are also required to provide copies of recent utility bills showing their current addresses.
Aside from that, Cash App's terms state that it cannot guarantee against fraud due to insufficient funds, stolen credentials, phishing attacks, malware, or bugs. The company further warns that it's not liable for any losses resulting from unauthorized transactions.
Still, given that Cash App is run by humans, it's inevitable that mistakes happen occasionally. According to the company, errors usually occur when orders are placed incorrectly or old records become outdated. Customers can file disputes anytime if they believe a mistake occurred, but Cash App typically resolves issues with affected customers within 24 hours.
Finally, Cash App lets you protect sensitive pieces of information yourself. Aside from requiring passwords, you can opt to keep your birthday encrypted. Otherwise, the app automatically fills in your date of birth when creating a new account.
Will Cash App succeed in disrupting the current status quo? Only time will tell.
Yes. Just like with many other forms of internet communication, scams exist on the internet today. Unfortunately, the nature of Cash App puts you at greater risk of falling victim to fraudulent activity.
A prime target for exploitation on the internet is cold calling telemarketers, especially those whose job relies heavily on convincing unsuspecting folks to hand over their hard earned dollars for dubious reasons. People tend to fall prey to these types of scams simply because they're desperate to avoid missing important calls. Sometimes, they give out their cell phone numbers without thinking twice.
This tactic is known as vishing, named after Voice Phishing. Similar tactics include smishing, SMS spamming, and whaling, which involves tricking victims into clicking links leading to malicious websites disguised as official sources.
Like your phone carrier, Cash App provides a toll-free hotline number that enables you to receive support from representatives regarding problems like technical difficulties, billing inquiries, and general troubleshooting.
However, since you don't necessarily know who's on the line until you initiate contact, it's easier for thieves to pretend to be the friendly helpers offering assistance. They can say whatever they please to convince you that they deserve an immediate response.
Even if you decide to trust somebody claiming to represent Cash App, you won't know if the person on the line is legitimate based purely on voice quality alone. After dialing our local representative, he said his name was Brian. He claimed to be working in the U.K., but upon closer inspection, I noticed his accent sounded distinctly American.
There are ways to verify a caller's legitimacy, but it often takes time to learn how to spot fakes versus legit concerns. Here's a quick list of red flags to watch out for:
Don't answer unknown incoming calls.
Look at Caller ID information.
Watch out for unexpected call lengths.
Consider how long it took the person to respond to previous emails or texts.
Use caution when requesting remote access to your computer.
Be wary of unsolicited attachments.
Ask for proof of identity.
Check out Cash App's Security page for more tips on protecting yourself from cybercriminals.
No. Using Cash App is definitely safer than leaving your home vulnerable to pickpockets or handing over your phone to scam artists hoping to steal your identity. Still, you should exercise your best judgment when deciding whom to share your login credentials with.
First off, you should consider whether or not you feel comfortable sharing your financial information with certain people. Some people prefer to use Cash App exclusively among trusted peers, whereas other folks may not mind keeping their habits separate from everyone else.
Second, remember that Cash App doesn't vet potential contacts beforehand. Anyone can sign up for an account and join the network, regardless of whether they're trustworthy or not. Even if they appear harmless, some users may lie about who they are or purposefully hide crucial identifying factors.
Cash app, a mobile payment service owned by Square that lets users send and request money in addition to withdrawing funds via ATM or debit card, has been around for years now — but it didn't take off until 2017 when Square CEO Jack Dorsey started promoting it as "the PayPal killer" of 2021.
Dorsey said at one point that he believed Cash App would soon become the biggest bank in America because so many people already have their banking accounts tied up with other services like Venmo or Zelle. In fact, according to Consumer Reports' 2020 survey, over 40 percent of Americans who had never used an online peer-to-peer payments platform reported they'd be interested in using them if given the chance.
But what exactly are the benefits of giving your money away to someone else through these apps rather than keeping it yourself? How can companies justify charging fees without actually providing any value? And why aren't there better options out there? We spoke with experts about all of this and more. Here are some answers we found.
First things first, let's talk about how you can access actual cold hard cash. According to Cash App's FAQ page, there are two ways to withdraw money from your account: either directly into your bank (which requires verification) or by requesting money from another user within Cash App. The latter method doesn't require any sort of identification whatsoever. It's also much faster since you don't have to wait for banks to open.
If you're not comfortable handing over your personal information to others, though, you'll need to go through traditional withdrawal methods. You will still be required to verify your identity before taking out that $20 bill from the gas station counter. But at least you won't have to worry about being scammed out of thousands of dollars worth of fake bills.
The answer is yes, but only in terms of the ability to exchange money between different parties. If you want something done right now, you should probably just ask somebody nearby. Otherwise, once you've verified your identity, you can simply swipe a credit card or checkbook at participating vendors and businesses. After which, you can choose whether you want to deposit those funds straight into your checking account or keep them as part of your balance.
You could also opt to transfer your entire remaining balance to another person or company instead. This option exists under the name PayPass Debit Card. While it may sound strange, the reason behind this feature is simple enough: to avoid fraudulent charges.
"[It] allows us to offer customers a way to receive money outside our own platforms," says Cash App spokesperson Michael Moeser. "We think offering consumers a wide variety of choices helps increase accessibility."
That being said, while you can technically spend your Cash App balance anywhere you please, we wouldn't recommend doing so unless you really know the individual well. Asking strangers to buy you dinner sounds nice, but that might turn sour pretty quickly if they try to rob you later. Plus, no matter where you decide to spend your money, you always end up paying a fee. Don't forget that!
In case you were wondering, Cash App isn't planning on implementing a system similar to Apple Pay where you can purchase products with your phone itself. That's primarily due to security concerns. A thief could theoretically steal your device and record everything happening on screen. On top of that, most retailers haven't yet equipped themselves to handle contactless transactions.
This means that if you want to stay safe, you should stick to normal old fashioned cash withdrawals whenever possible. No smart technology needed.
Again, the answer is yes. However, the distinction lies in how you use your account versus how other people use theirs. For example, if I give my friend Bob $100 to hold onto until next week, his balance is officially called "an asset." Meanwhile, mine is considered "money held in trust."
According to Cash App's website, each customer gets three types of virtual currency depending on how long they've signed up for their account:
Stripe Balance - This type represents your Cash App balance after all fees have been deducted from the amount deposited. It serves as the foundation for all purchases made within the app. Unlike regular checks or direct deposits, Stripe Balances cannot be cashed out in full. Instead, you must redeem them for goods and services.
Gift Cards - These represent non-transferable codes that allow you to shop at select merchants. They come in various values starting at $5.
Bundle Credit - This type represents credits that accumulate based on spending history. Credits expire every 30 days and can be redeemed toward future purchases.
Of course, none of this matters if you plan on getting ripped off by someone. But even then, you can always report scams to both Cash App and local law enforcement agencies.
Also note that if you lose track of your password, you can recover your username but not your password. Your username is unique to your email address, whereas passwords can change regularly.
As mentioned earlier, you can withdraw money from your Cash App balance by going to a physical location and swiping your card. Although it depends on your state laws, you usually won't incur extra fees for doing so. Most places will charge you no less than 3% per transaction plus whatever processing fee they determine is appropriate.
However, if you prefer digital exchanges, you can trade your digital assets against real ones. To convert your Cash App balance back into cash, head over to the Cash App Store inside the app. Then tap the menu icon located at the bottom left corner followed by Account Settings. Finally, click Exchange Virtual Currency. From there, you can swap your Bundle Credits for real American Dollars, Bitcoin, Litecoin, or Dogecoin.
To start trading, however, you will need to reach certain thresholds set by Cash App. Currently, its lowest tier costs 0.005 BTC per dollar traded, while its highest costs 1 bitcoin per dollar exchanged. Each time you complete a successful trade, you earn a small commission ranging from 50 cents to 2 bitcoins. Unfortunately, you're limited to a maximum number of trades per month.
Finally, keep in mind that Cash App offers several different features beyond buying and selling stuff. You can also rent property, invest in stocks, and manage your portfolio.
For anyone looking to learn more, consult the Cash App Help Center. There, you'll find detailed instructions on navigating the app, exchanging currencies, and more.
Cash App, which bills itself as "the fastest way to send cash," has become a popular option for people in need of quick access to their own funds. But what exactly happens when you sign up for an account with this mobile payment service? Does it really work like Venmo where you can transfer your friends' money around just by tapping out a request message?
In short, yes — but there are some caveats.
The most basic thing about using Cash App (which we'll refer to as CASH) is that you don't actually have to take any action at all to receive money. You simply open the app and find yourself staring at a screen full of dollar signs. The only caveat being that users who do not live within one of the company's supported states will be able to withdraw only $2 per day from each transaction they initiate.
So why would anyone want to set up a free account with a digital wallet that lets them deposit and then withdraw cash without doing anything other than opening apps? Simple. In addition to allowing you to perform peer-to-peer transactions, Cash also allows you to accept payments directly from others while still maintaining control over those transactions. That means that you could potentially offer your services as a freelancer or small business owner without having to worry about the risks inherent in processing credit card payments through third parties.
That said, there are two types of accounts available on Cash. There is the standard type of account offered to everyone, which requires no verification beyond providing your name, email address and phone number. Then there is the premium version of the app, which gives you the ability to hold onto user information and offers enhanced security features. If you're interested in learning more about these options before signing up, check out our overview of Cash's different fee structures below.
Here's everything else you need to know about how and whether you can get paid via Cash App.
No. As long as you follow the simple steps outlined above, you should never encounter any problems when sending money to another person. Simply log into the app and select Send Money, enter the amount you'd like to send, add a memo and hit Request Funds. When you press Request Funds, the recipient will see a notification that says "You've sent X dollars." They may even get a text saying the same thing. This system works so well that the founder of Cash, Antonio Garcia Martinez, was recently named Entrepreneur Of The Year By Ernst & Young.
This process makes it extremely easy for users to avoid getting ripped off during transactions. It's important to note that the nature of peer-to-peer payments inherently creates potential points of fraud risk. For example, if you were to wire money to a friend, you might ask them to keep it somewhere safe until you contact them again. With Cash however, you could theoretically walk up to someone on the street and hand them $100. While it wouldn't hurt to suggest keeping the cash safely tucked away for now, it's unlikely that something like this could happen without the victim having knowledge of it beforehand.
While Cash may seem like a great place to store your savings, it's probably not the best platform to start earning extra income. Not because Cash doesn't let you turn passive streams of revenue into active ones, mind you. Just because the opportunity isn't immediately obvious. Here's why.
First, Cash's primary value proposition involves holding onto your money rather than spending it. Think of it as a bank account but instead of paying interest, you're charged fees whenever you try withdrawing cash. To compensate for this, Cash charges higher rates than banks typically do on incoming deposits. According to a recent statement made by Cash's CEO, this structure ensures customers always end up ahead after every exchange. However, many experts believe that such high interest costs ultimately discourage new depositors.
Second, although Cash does allow you to borrow against your balance, you won't reap much benefit unless you go through a lot of transactions. Most borrowers tend to repay loans quickly, meaning that the benefits of taking out a loan often outweighs the cost involved.
Third, although Cash's fees aren't necessarily bad, they certainly aren't ideal either. Compared to traditional banking institutions, Cash tends to charge slightly higher withdrawal fees. On top of that, Cash also imposes penalties for cashing out too frequently. These factors combine to limit the average customer's earnings potential.
Of course, none of this changes the fact that Cash is an excellent tool for storing your wealth. And since it's free to download and use, there's little reason not to give it a shot.
Yes, absolutely! Although the actual app behind Cash is based on Square technology, the service is entirely separate. What separates Cash from Square's Venmo is that it operates under strict regulations designed to prevent fraudulent activity. Unlike Venmo, Cash is operated exclusively by licensed financial companies that adhere strictly to federal guidelines regarding consumer protection.
As far as scams are concerned, it's worth noting that Cash's founders claim to have taken numerous measures to protect consumers from falling prey to phishing attacks. One of these protections includes making sure that the URL associated with your account contains the word "cash" (i.e., https://www.moneyapp.co/your_username). Another feature prevents unauthorized withdrawals by automatically locking your balances once you haven't used them for six months.
Although Cash appears genuine, it's important to remember that peer-to-peer platforms like this one come with certain inherent challenges. Namely, they present opportunities for criminals to exploit unsuspecting members looking for ways to launder illicit profits. At least part of the solution to that problem comes down to educating yourself about how online criminal activities usually proceed.
For instance, it's common practice for hackers to gain access to personal data including usernames, passwords and emails. Afterward, they can use this info to steal identities and launch phishing campaigns in order to trick victims into divulging sensitive information. Similarly, it's possible for attackers to impersonate legitimate businesses in order to obtain login credentials belonging to verified users. Once inside a user's account, thieves can easily manipulate the settings to extract additional funds.
Finally, it's possible for malicious actors to pose as trusted partners and convince individuals to share confidential details pertaining to their finances. Phishers may target specific demographics, like seniors or immigrants, by posing as representatives of government agencies offering tax refunds or assistance with social programs.
We strongly recommend following general safety practices for protecting yourself from identity theft. Don't fall for unsolicited calls claiming to be affiliated with reputable organizations like yours truly. Be wary of links posted on websites that don't appear trustworthy. Never provide your password or username to anyone asking for it. Finally, learn about known scams so you can spot suspicious behavior.
It goes without saying that you shouldn't trust Cash with private financial information. Unfortunately, it's impossible to fully eliminate the possibility of unfortunate events occurring due to human error.
However, Cash takes proactive measures to safeguard your privacy. For starters, the site encrypts messages between users in accordance with industry standards. All communication involving money transfers is protected on behalf of both sender and receiver. Users can also choose to verify themselves with a selfie ID. Anyone trying to hack into your account must successfully answer three consecutive CAPTCHAS before gaining entry. Lastly, Cash employs automatic safeguards designed to detect abnormal patterns indicative of fraudulent activity.
If you'd like to learn more about how you can help stop cybercrime, read up on how to report online crime.
Unfortunately, yes. Like any online interaction, there's always the chance that something could go wrong. Luckily, Cash provides several layers of protection intended to shield you from becoming a victim of fraud. First, the app uses SSL encryption to secure all communications between you and your contacts. Second, the site utilizes multi-factor authentication to ensure that only authorized individuals can complete requests initiated by other users. Third, the app limits the total value of individual transactions to $1,000. Transactions exceeding that threshold require special approval from Cash employees.
Lastly, Cash allows you to create multiple profiles linked to your unique email addresses. Each profile serves as a separate gateway leading back to your main dashboard. Using this strategy, Cash aims to prevent cross-border transactions from triggering international sanctions.
If you ever suspect that someone's attempting to defraud you using your account, the first step is to notify Cash's support team. From there, you'll receive detailed instructions on how to block future attempts.
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