Square Cash App Review: What Is It and How Does It Stack up Against Its Competitors?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Reviewed By

Updated on Friday, October 16, 2020

Cash App can serve as a one-stop shop for many of your financial needs. Owned and run by Square, Inc., it is a mobile-first, peer-to-peer (P2P) payment service, bank account, debit card and investing service all in one.

With no monthly fee, Cash App may be a good fit for those who want to send money conveniently, and perhaps dip their toes into stocks or Bitcoin. However, its bank account doesn’t earn interest, which will be a drawback for savers. Our full review of Cash App covers its upsides and downsides, including its safety features and how it compares to other P2P payment products.

What is Cash App and how does it work?

Cash App is a money management app that allows you to send money to friends and family, spend the money you receive, earn rewards and even invest in stocks and Bitcoin. The app is available to download in the Apple App Store or Google Play Store.

Cash App requires you to open an account to use its services. While you can get started with just a phone number or email address and a linked bank account, Cash App may require more personal identification information if you want to send money from your Cash App balance.

You must be a U.S. resident and at least 18 years old to open an account, although a U.K. version of Cash App is also available.

Cash App payments

Once you have a Cash App account, you’ll get your own $cashtag, or unique Cash App identifier, that you can send to friends and family when you want to send or receive money.

Sending money through Cash App is as easy as hitting the pay button. You’ll type in the name, $cashtag or phone number of the person who’s getting the money and the amount you want to send. Then, the recipient will get an email or text message with the cash. You also can send money from a browser if you have the recipient’s $cashtag URL.

Money can be sent from a debit card, credit card or from your Cash app balance. You can request money from someone in this way, too. U.S. and U.K. Cash App users can send and request money among each other at no extra cost.

Once you have accumulated a Cash App balance, you can cash out those funds into your linked bank account. You can opt to cash out the full balance or choose a specific dollar amount. You’ll also be able to select how fast you want your money deposited, whether right away (for an extra fee) or at the standard length of up to three business days, at no additional cost.

Cash App banking

You also can use Cash App as an alternative to traditional banking, although only to a certain extent. For one, your Cash App balance comes with routing and account numbers, which you can use to set up direct deposits. That means you can send your paycheck directly to your Cash App account instead of to a regular checking account.

However, Cash App balances are not FDIC-insured, which leaves them unprotected if Cash App were to suddenly fold. Cash App balances also don’t earn interest. While you could use your Cash App balance for more everyday needs, your money likely would be better off in an interest-earning checking or savings account for the longer term.

Cash App Cash Card

You can also add on a Cash Card debit card to pay for purchases online and in stores with the funds in your Cash App balance. While you can use the card at ATMs for a fee, you cannot add cash to your Cash App balance with the Cash Card. If your Cash Card is ever lost or stolen, you can disable the card within the app — and enable it again if you find it, or order a new card if you don’t recover the old card. The Cash Card is provided by Lincoln Savings Bank.

The Cash Card also allows you to take advantage of Cash App Boosts, which are discounts offered at select stores like coffee shops and restaurants. For example, you can snag 10% off a purchase at a grocery store or even with a gaming network. You can find all of the available Boosts listed in the app, and you must activate the one you want to use before doing so. You can activate only one Boost at a time, though you can swap them out as frequently as you want.

Cash App Investing

You can open a brokerage account with Cash App Investing, which is a FINRA-registered broker-dealer. Cash App Investing allows you to buy and sell individual stocks with your Cash App balance, as long as you have at least $1.

This is a self-directed brokerage account, which means you call the shots; Cash App Investing does not provide any investing advice or recommendations. Further, you’re limited to individual stocks with Cash App Investing. If you’re looking to build a more robust and diversified portfolio, consider a robo-advisor, which allows you to invest in a wider variety of asset classes, all from your computer or smartphone.

You also can use your Cash App balance to buy and sell bitcoins in the app within seconds. You can find the Bitcoin Buy and Sell features within the Investing tab of Cash App. To buy Bitcoin, you must have a Cash App balance and you may have to enter geographical information. To sell Bitcoin, you just have to tap the Sell button and enter the amount you want to sell. Note that you may incur fees for these transactions (detailed below).

Cash App also accepts bitcoin deposits, up to $10,000 in a seven-day period.

Cash App pros and cons

Pros

  • Free & immediate P2P payments: As a payments system, Cash App works best when you’re sending money from your bank account, debit card or Cash App balance, as that allows you to avoid the fee associated with sending money via credit card.
  • Debit card available for purchases: The Cash Card debit card adds payment convenience, allowing you to spend your Cash App balance directly wherever Visa is accepted.
  • Opportunity to invest in stocks or bitcoin: Cash App Investing is a handy feature to include within a financial app, especially for younger users who value a mobile experience and can benefit from investing exposure.

Cons

  • No FDIC insurance: Cash App is not a complete alternative to a real checking account, as it does not offer FDIC insurance.
  • No interest earned on balance: Cash App balances don’t earn interest, which is an important aspect of a worthwhile deposit account.
  • ATM fees: The Cash Card is best used for purchases only and not at ATMs, where you’ll get charged an extra $2 fee, detailed below.
  • Limited investing opportunities: Cash App Investing limits you to trading individual company stocks, which prevents you from building a safer, more diversified portfolio in the app.

Cash App fees and fine print

Cash App Fees
Monthly service$0
Per purchase $0
ATM withdrawal$2
Inactivity$0
Send money from credit card3% of transaction amount
Instant deposit to your bank account1% or 1.50% of transaction amount
Cash App Investing$0
Investing commissions$0
Bitcoin purchases and sales Service fee per transaction
Potential additional market fee

There are only a few instances where you’ll need to worry about Cash App charging you for its services. For one, sending money through the app from a credit card will cost you 3% of the transaction amount. You’ll also be charged 1% or 1.50% of the transaction amount when you request that Cash App instantly deposit your balance into your linked bank account.

Each transaction you make at an ATM with your Cash Card will cost $2. You will likely also face a third-party surcharge from the ATM owner or network. However, Cash App instantly reimburses up to $7 of these fees for customers who have at least one paycheck of at least $300 directly deposited into their Cash App account each month (unemployment deposits qualify).

You may also face fees when buying and selling Bitcoin via Cash App. This includes a service fee per transaction and a potential additional fee determined by price volatility across U.S. exchanges. You’ll see the amount of these fees on your trade confirmation before you complete a Bitcoin transaction.

Cash App Limits
Sending money via Cash App$7,500 per transaction or in multiple transactions over any 7-day period
ATM withdrawals*$310 per transaction
$1,000 in any 24-hour period
$1,000 in any 7-day period
Cash App Investing minimum sale$1
*Note that using your Cash Card for cash back at checkout counts toward your ATM limits.

If you try to send more than $250 in any one transaction or in multiple transactions over any seven-day period, Cash App will require additional identification information to verify those transactions. The same applies if you receive more than $1,000 in any 30-day period.

When investing with Cash App, you’re limited to three day trades (buying and selling a stock in the same day) within a rolling five-day trading period. A sale must be at least $1. If you’re selling only some of the stock you own, it must be less than 98% of your total; otherwise, Cash App will require you to round up to 100%.

Is Cash App safe?

Cash App is safe to use for the most part, as long as you follow instructions, keep other people out of your account and avoid holding much money in your balance. Cash App has security locks, including PIN entry, touch ID and face ID. The app also uses encryption to protect data, and stores Bitcoin in a secure system.

No FDIC insurance: Unfortunately, Cash App doesn’t provide FDIC insurance — government-backed deposit insurance — on customers’ Cash App balances. This means that if Cash App were to go under, your Cash App balances could be lost.

This makes your Cash App balance a pretty unsafe place to send and keep your direct deposits, along with the rest of your money. It’s best to only hold your money temporarily in Cash App when moving money around.

Cash App fraud protection offered: Cash App provides fraud protection for unauthorized payments made on your account. This includes if someone were to steal your password to log into your account and make transactions without your consent.

As long as Cash App can verify the transaction was unauthorized, it will cover you for the full amount of the unauthorized transaction. However, if you willingly provide someone with your login information and they make a transaction, Cash App won’t cover it — even if you did not authorize the transaction.

If you notice a fraudulent purchase made from your Cash Card, Cash App recommends contacting the merchant directly to cancel the pending transaction.

Common Cash App scams to look out for

Money scams often cause the biggest headaches with P2P payment systems. Here are three scams to watch out for with Cash App:

  • Someone sends you money “in error”: In this scam, someone pretends they sent you money by accident and asks you to send them the money back. However, once you do, the transfer sent “by mistake” is eventually reversed, and the scammer runs off with your cash.
  • Someone pretends to be Cash App customer service: You can only access Cash App customer support if you’re logged into your Cash App account (believe us, we tried). There is currently no Cash App phone number you can call for support, so be careful if someone who claims to be from Cash App contacts you over the phone, on social media, via email or by text message — especially if they ask for sensitive account information.
  • Someone cancels your payment after receiving a product: Product sellers beware: People can cancel their own payment with Cash App. A payment can also be reversed if the money is from a stolen source. In other words, cash is technically not yours until it is deposited into your bank account.

If you’re doing business, you’re likely better off signing up for a Square business account Fortunately, Square has many other hardware and software products for merchants that offer more security for sellers than Cash App.

If you already got scammed, report it to the company as soon as possible. You may not get compensation, but reporting new scams could help the company to warn other users.

Cash App vs. other P2P payment networks

Here’s how Cash app stacks up against the competition as far as transfer speed, fees and security.

 Standard fee to useTransfer to bank account speedInstant transfer feeCredit card fee

CashApp

$0Up to 3 days1% or 1.50% of transaction amount3% of transaction amount

PayPal

$0Next business day1% of transaction amount (max $10)2.90% of transaction amount + fixed fee based on transaction currency

Zelle

$0Within minutes$0Not compatible with credit cards

Venmo

$01 to 3 business days1% of transaction amount (min $0.25/max $10)3% of transaction amount

Cash App vs. PayPal

If it’s international reach you’re after, Cash App is pretty limited. Instead, consider PayPal, or one of the many of the other online remittance services available.

The cost to send money internationally via PayPal varies from location to location. Otherwise, a standard transfer between U.S. bank accounts is free, while sending money with a credit card, debit card or PayPal Credit will cost an extra fee.

Cash App vs. Zelle

Zelle allows you to send money directly from your bank account to another bank account, with the peace of mind that comes with big bank security. Transfers between Zelle account holders can happen within minutes and are free, although your bank may charge a fee for cash transfers.

Even if your bank doesn’t support Zelle, you still can send money through its app. Like with Cash App, make sure to only send money to people you know and trust; Zelle won’t help you if you authorized a payment, but the person on the receiving end is faulty.

Cash App vs. Venmo

Venmo is the most similar to Cash App, as it’s a mobile-first service intended to help you send money quickly and conveniently, whether with debit or credit, or via a bank account. The two apps also have almost-identical pricing schedules.

You also can accumulate a Venmo balance, which is accessible via the app and the optional Venmo debit card. Here, Venmo outdoes Cash App: The Venmo card can earn cash back through Venmo Rewards and provides free withdrawal access to MoneyPass ATMs.

Venmo can also get you your paycheck up to two days earlier than traditional banks when you set up your Venmo account to receive your direct deposit paycheck. Again, Venmo comes out ahead here by providing FDIC insurance on your direct deposits.

Is Cash App right for you?

Yes, if you want:

A convenient P2P payment system

Some store discounts

No, if you want a:

Valid banking alternative

Diversified investment portfolio

Now that you know what Cash App has to offer and how it stacks up against its competitors, it’s time to decide whether Cash App is worth your download. If it’s a simple P2P payment system you want, Cash App is certainly a solid option. It’s especially useful if you have to send money to a Cash App user in the U.K.

If you’re looking for a mobile-first or online bank, Cash App isn’t it. While earning discounts through Boosts may come in handy, Cash App is a soft option in an industry full of stronger banking contenders like N26, Simple and even Cash App’s competitor, Venmo. Even if you’re having trouble getting into traditional bank accounts, consider second chance checking accounts instead, which offer FDIC insurance and are designed to help you get back on track.

Finally, Cash App isn’t a bad option if your sole investing goal is to trade individual stocks, especially since it’s a generally free process. However, an important part of investing is diversifying your portfolio with a variety of assets like ETFs, mutual funds, bonds and more. Younger investors who might be drawn to Cash App’s investment platform may want to consider Robinhood instead, a mobile-first investment service that provides access to more investment types and resources.

All information included in this profile is accurate as of 10/16/2020. For more information, please consult Cash App’s website.