Cash App Vs. Venmo – Forbes Advisor

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Cash App and Venmo are widely used peer-to-peer (P2P) mobile payment apps. Both allow you to send and receive money from your smartphone. But while these two apps offer similar features and services, there are differences to consider when choosing the best one for your needs.

Here’s an overview of Cash App and Venmo—how they work and other details you need to know.

Cash App

Cash App allows you to send, receive and invest money from your mobile device. Block, Inc., formerly Square, Inc., launched the app in 2013 (initially named Square Cash) to compete with mobile payment apps like Venmo and PayPal.

How It Works

You can download Cash App for iOS devices via the App Store, where it earns 4.7 stars out of 5, and for Android devices via Google Play (4.6 stars out of 5).

You can send and receive money through the app, set up direct deposits to your account and use a debit card. You can also purchase stock and Bitcoin through Cash App and file taxes.

When you sign up for Cash App, you’ll create a unique user name called a $Cashtag. Your $Cashtag is how other users identify you when sending or requesting money. And it’s one of several ways you can find individuals or businesses within the app. You can also search for individuals and businesses by name, phone number or email address.

Cash App users can opt to receive a Cash Card—a debit card tied to their Cash App account. The Cash Card can be used to make purchases online and in person.

You can also perform other banking tasks with Cash App, such as setting up direct deposits. The funds from direct deposits are available immediately, which Cash App says is up to two days earlier than many banks.

Cash App is a financial platform, not a bank. The company’s banking services and debit cards are provided through its bank partners. Account balances are insured by the Federal Deposit Insurance Corporation (FDIC) through partner banks. Its investing services are provided through Cash App Investing LLC, registered with the Securities and Exchange Commission (SEC) as a broker-dealer and a member of the Financial Industry Regulation Authority (FINRA).

Accounts are available for users ages 13 and older, although users 13 to 17 years old need parental permission to access some of the app’s more advanced features, including P2P transactions and direct deposit.

Sending and Spending Money

You can send instant payments to other people and select businesses through Cash App. There’s no cost to send money from your Cash App balance, a linked bank account or a debit card. Using a linked credit card to pay costs 3% per transaction.

Cash App payments occur instantly in most cases. A pending payment indicates that you need to take action to complete the transaction.

Requesting and Receiving Money

Cash App allows you to request payment from individuals. To do so, enter your request amount and tap “Request” within the app. From there, you can enter a name, $Cashtag, phone number or email address. There’s an option to include a note before requesting payment.

Received payments show up in the app’s activity feed for you to review. All payments end up in your Cash App balance, which you can keep within the app, spend or transfer to your linked bank account.

Fees

There’s no fee to download Cash App or open an account. And users aren’t charged fees to send or receive money through the app.

There are two options to transfer money to a linked bank account—standard or instant transfers. Standard deposits are fee-free and usually arrive in your bank account within one to three business days. Cash App charges a 0.5% to 1.75% fee ($0.25 minimum fee) for instant transfers. There’s a 3% fee to send money via a linked credit card.

Cash App charges businesses a 2.5% fee per transaction accepted and a 2.75% fee when accepting credit card payments. There are tax implications attached to Cash App business accounts.

Pro

  • No cost to download and use
  • Instant P2P transfers for Cash App to Cash App payments
  • Debit card and direct deposit capabilities
  • Fee-free tax filing through Cash App Taxes
  • Invest in stocks and Bitcoin

Cons

  • Transaction limits for new users
  • Can’t cancel authorized transactions
  • 3% fee to send money using a credit card

When To Use Cash App

Cash App is great to use when you need to send money quickly to family or friends. And it’s a good choice if you’re looking for features in addition to P2P payment, like a debit card and a place to send direct deposits.

Venmo

Venmo is a P2P payment app, only available in the US, that lets you send and receive money digitally. You can also use it to make purchases with authorized merchants. As of November 2021, Venmo had more than 80 million users. Founded in 2009, Venmo is now a service of PayPal, Inc.

How It Works

You can download Venmo for iOS devices via the App Store, where it earns 4.9 stars out of 5, and for Android devices via Google Play (4.2 stars out of 5).

You can send or request money through Venmo, set up direct deposits to your account and use a debit or credit card to pay at select merchants. You can use Venmo to purchase certain types of cryptocurrency as well.

Your Venmo username is how other users identify you when sending or requesting money.

There’s a social component to Venmo. The mobile app lets you use emojis and stickers to describe payments. Users can leave their accounts public so friends or other individuals can see payments made or received. You can also switch to private if you prefer not to share your information.

Users can sign up for a Venmo debit card or credit card and set up direct deposits. If you’re interested in cryptocurrency, you can also invest in crypto through the Venmo app.

Like Cash App, Venmo is not a bank—it’s a financial platform. The company’s banking services and debit cards are provided through its bank partners. Funds held in your Venmo account are only eligible for FDIC pass-through insurance if you’ve added money to your account via direct deposit or mobile check deposit.

Sending and Spending Money

Within Venmo, users can send money to individuals, groups of people, and select merchants, online businesses and retailers. Typically, payments to individuals occur instantly.

There is no cost to send money through Venmo. Payment methods include a linked bank account, debit card or your Venmo account balance. There’s a 3% per transaction fee to send money with a linked credit card. If there’s not enough money in your Venmo balance to cover a transaction, it will be funded by your other external payment method.

Requesting and Receiving Money

Requesting money in Venmo occurs on the same screen where you send payments. Enter the name of the person you want to send money to, enter the amount, include a note, and tap “Request.”

Payments received end up in your Venmo account balance. You can choose to keep your money in Venmo or transfer it to a linked bank account.

Fees

There’s no cost to download or create a Venmo account. And there are no fees to send or receive money through a linked bank account, debit card or Venmo account balance. There’s a 3% charge to send payments using a linked credit card. You can keep money that you receive in your Venmo account or transfer it to a linked bank account.

Venmo also offers options for standard and instant transfers to a linked bank account. Standard transfers are fee-free and typically take one to three business days. Beginning May 23, 2022, Venmo instant transfers cost 1.75% (minimum $0.25 fee, $25 maximum fee) per transfer.

There are no monthly fees attached to business accounts, but Venmo charges sellers 1.9% plus $0.10 per transaction through the app. Venmo business accounts are subject to tax reporting.

Pro

  • No cost to download and use
  • Instant P2P transfers for Venmo to Venmo payments
  • Debit card and credit card available
  • Use Venmo to pay at authorized merchants
  • Direct deposit is available

Cons

  • Can’t cancel authorized transactions
  • 3% fee to send money using a credit card
  • No international transactions

When To Use Venmo

Venmo is handy when you need to send money quickly to family or friends or divvy up a bill. It also works well as a tool for online shopping. You can connect your Venmo account to select merchant websites to use as payment for purchases. You can also use the mobile app to make purchases in person at select retailers.

Bottom Line

Whether you choose to use Cash App, Venmo or both of these P2P payment apps depends on your needs.

Cash App and Venmo offer features beyond sending, requesting and receiving money. Both apps offer debit cards. Venmo also offers a credit card. For users interested in investing, only Cash App provides the ability to invest in stocks through its platform. Both Cash App and Venmo offer the ability to purchase cryptocurrency.

Customers that open a debit card with either app gain access to additional banking features, including direct deposit. And Cash App and Venmo both allow users to receive their paycheck up to two days early.

While Cash App and Venmo are geared toward personal use, they can also be used for business transactions.

Frequently Asked Questions (FAQs)

What security features do Cash App and Venmo offer?

Cash App and Venmo both employ the latest security measures to protect app users, their money and their personal information. Security measures include high-level encryption, security locks, notifications and alerts, and fraud protection.

Can I withdraw cash at an ATM from my Cash App or Venmo account?

Cash App or Venmo users with associated debit cards can withdraw cash at ATMs. Cash App customers can withdraw money at any ATM for a $2 fee. Cash App waives ATM fees for customers who receive $300 or more in direct deposits through the App each month.

Venmo charges a $2.50 domestic withdrawal fee for using ATMs—you can withdraw money at ATMs with the Mastercard, PULSE, Cirrus or MoneyPass marks.

Are Cash App and Venmo better than PayPal?

Cash App and Venmo are geared towards personal use with family and friends. PayPal allows you to send money to individuals, but it’s also known for its use by businesses.


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