Cash App is one of many money transfer services that allow users to receive and send money. If you’re just getting into sending people money online, it’s easy not to be informed of everything these money transfer services have to offer.
Cash App can help you split the cost of a concert, send payments to your landlord, pay friends back for lunch, or any other money-sending transaction you want to achieve. Cash App also operates like a bank account, providing users a debit card (Cash Card) to make transactions using their cash card funds. Our favorite feature on the app is the Investing Tab, which allows and encourages users to invest some of their money in stocks and even buy and trade bitcoin.
How Does Cash App Work?
First things first, download the Cash App on your phone. From there, the app will walk you through registration, where you’ll be prompted to create an account and link your bank account.
The money you’ll be sending and receiving will be credited (or debited) from the linked bank account. This is a similar service to Venmo and PayPal, which also allows you to hold any received funds in the app until you’re ready to withdraw them.
NOTE: The funds you receive on Cash App will not appear in your bank account until you transfer them manually.
To send money:
- Open the Cash App on your phone. You should be prompted on the main screen with the numbers.
- Enter the amount you intend to send.
- Hit “Pay.”
- Enter the person’s “$Cashtag” or phone number.
- Write what you are sending the payment for (optional).
- Hit “Pay.”
To view the record of received payments, go to the “Activity” tab. You can also see the money transferred into your Cash App account on the “My Cash” tab, which keeps a record of your transferred funds.
Advantages of Using Cash App
No Cash App Fees on Basic Services.
Cash App doesn’t impose monthly fees on users. There are no transfer fees, inactivity fees, or international transaction fees.
Comes With a Free Debit Card (Optional).
The “Cash Card” lets users make purchases and transactions with the money they have in their Cash App account instead of their linked bank account. The Cash Card is unique to a user’s Cash App account and isn’t linked to a bank account.
Free ATM Withdrawals (Direct Deposit Required).
If you choose not to set up the direct deposit, the fee is $2 to use the ATM with a Cash Card.
“Cash Boosts” – Save Money With the Cash Card.
Cash Boosts work similarly to “cashback deals” banks offer. Cash App users who have the Cash Card can pick a specific “boost” on their account that enables them to save money on a purchase with a particular merchant (for example, 10% off with Uber Eats). The only catch is that only one boost is allowed to be running at a time, but you can change “boosts” as frequently as you want.
Cash Bonus When Friends Join Using your Referral Code.
If you send a referral link to a co-worker and they join Cash App using your link, then both of you get a cash bonus. The referrer receives $5 per referral who registers, and referees each receive $10 for joining.
Investing and Earning.
Unlike other money transfer services, Cash App allows users to purchase stock in particular businesses with as little or as much money as you want to spend. Stocks can even be purchased with the funds in your Cash App account – not your bank account.
Bitcoin Compatible (Fees Included).
To take it a step further, Cash App allows users to buy and sell bitcoin but will charge two sets of fees: a service fee for the transaction and an extra fee determined by price fluctuations across U.S. markets.
Things to Consider Before Signing Up for Cash App
Fees for Credit Card Use.
Cash App charges 3% of the transaction to send funds by linked credit card. This is a reasonably standard fee amongst money transfer services; Venmo, for instance, also charges 3% to send money when using a linked credit card. Use your debit card account or the funds in your Cash App account to make basic transactions to avoid this fee.
Limited Spending on the Cash Card.
Although a convenient feature, the Cash Card is pretty limited. The maximum you can spend on your Cash Card is $1,000 per week and $1,250 per month.
Limited Withdrawal Limits on the Cash Card.
The maximum you can withdraw at an ATM or store using cashback is $250 per transaction (per day), $1,000 per week, and $1,250 per month.
Funds Aren’t FDIC-insured.
Cash App’s operations may operate similarly to a bank, but there is a sharp distinction between the money transfer app and an established financial institution. Even though FDIC-insured Sutton Bank distributes the Cash Card, users’ funds on the app are never held with Sutton Bank and therefore don’t receive FDIC coverage.
As more people realize the benefits and convenience of cashless transactions, tech companies have made available apps like Cash App that are bound to become well-established financial institutions in the future. Cash App has been growing in popularity and offers some unique features compared with other money transfer alternatives, like buying stocks, getting exclusive savings with “cash boosts,” and buying and selling bitcoin. Now that you know how Cash App works, it’s time to visit the app store!