Cash App

Cash App (formerly Square Cash) is a mobile payment service available in the United States and the United Kingdom that allows users to transfer money to one another (for a 1.5% fee for immediate transfer) using a mobile phone app.[1] In September 2021, the service reported 70 million annual transacting users and US$1.8 billion in gross profit.[2]

Cash App
Developer(s)Block, Inc.
Initial releaseOctober 15, 2013 (2013-10-15)
Operating systemAndroid, iOS
Available inEnglish, French
TypeMobile payment
Websitecash.app

History

Cash App was launched by Block, Inc. (formerly Square, Inc. at its launch) on October 15, 2013,[3] under the name "Square Cash".

In March 2015, Square introduced Square Cash for businesses. This allowed individuals, organizations, and business owners to create a unique username to send and receive money, known as a $cashtag. Since then, the $cashtag has become the most popular method for users to transfer money.[4][5]

In January 2018, Cash App added support for bitcoin trading.[6][7][8]

In October 2019, Cash App added support for stock trading to users in the United States.[9]

In November 2020, Square announced it was acquiring Credit Karma Tax, a free do-it-yourself tax-filing service, for $50 million and would make it a part of its Cash App unit.[10]

On November 3, 2021, Square opened Cash App to teenagers between 13 and 17. The app previously required its users to be at least 18 years old. Younger teens will need a parent or guardian to authorize their account and will not have access to cryptocurrency or stock trading until they turn 18.[11]

On April 4, 2023, Cash App founder Bob Lee was stabbed to death in San Francisco, California.[12]

Services

Banking

The service allows users to send, receive, and store money within the United States and United Kingdom, international transfers were not initially supported.[1][13] Users can transfer money out of Cash App to a bank account in their country. The Cash Card is a customizable debit card that allows users to spend their money at various retailers and withdraw cash from an ATM.[14][15][16] When signing up for the Cash Card, users can customize it by selecting a color, adding stamps, drawing on it, and even making the card glow in the dark. The card with the final design is mailed to the user.[17]

As of March 7, 2018, the Cash App supports automated clearing house (ACH) direct deposits.[14][18] Cash App also supports cash deposits, called "Paper Money Deposits": cash is taken to a participating retailer, who scans a barcode to deposit the money with Cash App, who charge a fee of $1 or more, depending on the retailer.[19]

Peer-to-peer money transfer

Users can request money from and transfer to other Cash App accounts via phone number, email, or $cashtag[20] (or £cashtag for accounts based in the United Kingdom). When transferring money, users can optionally add a message to be sent to the counterparty.[21] Cash App provides two options to transfer money into a third party bank account: free within 3–5 business days, or instant with a 1.5% fee.

Unverified accounts can only send up to $250 per week and receive $1,000 per month. To verify an account, a user must submit their legal name, date of birth, and, in the US, the last four digits of their social security number. Verification raises the weekly sending limit to $7,500 per week and removes the receiving limit.[22]

Cryptocurrency

In 2018, the capability to buy and sell bitcoin cryptocurrency was added to the app,[6] for adult users only.[11] Users can also send bitcoin to each other using their $cashtag, deposit bitcoin into the app from another source, and withdraw their bitcoin to an external wallet. Unlike other cryptocurrency exchanges, buying and selling bitcoin on Cash App is instant and does not require confirmation on the blockchain. As of 2023 the only cryptocurrency supported by Cash App was bitcoin.[23]

Investing

In 2020, the capability to trade stocks was added to the app for adult[11] United States residents only.[24] Users can buy and sell fractional shares of most publicly traded companies with a minimum of $1. Stock trading follows standard market hours of 9:30 a.m. – 4:00 p.m. EST and can be managed from the app's investing section.

Finances

As of November 1, 2021, Square had a market capitalization of $117.4 billion.[25] Its largest market competitor is PayPal, which owns Venmo. Other major competitors include Apple Pay, Google Pay, and Zelle.

Business model

Cash App is free to download for Android devices from Google Play, for iOS devices from the Apple App Store, and other mobile store platforms. Because the app is initially free, it incentivizes more users to create an account and use its services. Additional services beyond standard money transfers are available for small initial fixed costs plus percentage fees.[26]

Cash App's primary income is from users withdrawing funds from the app to their linked bank accounts. Money can be transferred into a third-party bank account without charge within three to five business days, or instantly for a 1.5% fee.[27]

If users do not have a direct deposit account with the app, they will be charged a $2 fee for withdrawing money from an ATM. Cash App allows users to buy and sell bitcoin from their platform for a small service fee based on the current bitcoin market volatility. Businesses can also accept Cash App as a form of payment and charge a transaction cost of 2.75%.

Like banks, Cash App can lend money deposited by users to various institutions, charging interest, known as money creation. Cash App is required to hold 10% of users' accounts liquidity as part of the fractional-reserve banking to protect depositors in the event of a bank run.

Safety and protection policies

Cash App uses a combination of encryption and fraud detection technologies to help secure users' data and money. All data are encrypted and sent to Square's secure servers over any type of connection (public and private WiFi and all forms of mobile data). If fraud detection is triggered at any point during a transaction, Cash App will automatically cancel the transaction.[28]

To further increase security, upon signing into an account, a user is sent a one-time use login code by SMS or email.[28]

Cash App includes a Security Lock option which requires users to enter their password before completing any transaction.[28]

Fraud and illicit activity

There has been a reported history of scams via Cash App. Common scams include customer support impersonation, fake offers and programs, and the selling of fake expensive items.[29] There is little buyer protection, making these scams hard to dispute, unlike payment services such as PayPal.[30]

Since the start of the COVID-19 pandemic and the rise in use of payment apps, there has been a notable increase in reported scams.[31] In one instance, a man was scammed out of $24,000 by customer support impersonation.[32] In another instance, a scammer used the public video of a female Waffle House worker holding a baby in a kitchen to fabricate an emotional story. The scammer used social media to share their Cash App information in the hope of receiving donations.[33]

Millennials frequently utilize payment platforms like Cash App and Venmo to pay for illegal drugs or gamble.[34] In June 2021, police in West Baltimore arrested seven people for using Cash App to sell cocaine and heroin to nearby neighborhoods.[35]

Cultural impact

In 2018, Cash App surpassed Venmo in total downloads (33.5 million cumulative), becoming one of the most popular peer-to-peer payment platforms.

Cash App is mentioned by about 200 hip-hop artists in their song lyrics, leading some to assert that it is now "ingrained in hip-hop culture," with its popularity stemming from the Black community in Atlanta.[36][37] Some cite the early adoption of cryptocurrencies among members of the rap community as another reason for Cash App's cultural cachet. The popularity of the app in hip-hop is reflected in Square's partnerships with prominent rappers, such as Travis Scott, Megan Thee Stallion, and Cardi B.[37]

Social media influencers frequently use Cash App to request donations from their followers. Every Friday since 2017, Twitter users retweet posts from the official Cash App account with the #SuperCashAppFriday hashtag to potentially win $10,000 to $50,000. These posts often have a notable amount of engagement.[38]

References
  1. Gebel, Meira (December 31, 2019). "Cash App does not work internationally — here's what you need to know". Business Insider.
  2. Levy, Adam (2021-09-20). "Don't Look Now: Square's Cash App Is Almost as Big as Venmo". The Motley Fool. Retrieved 2021-11-02.
  3. "Cash App Design". read.cv. Retrieved 2023-07-17.
  4. "Square Cash is Open for Business". Square. Retrieved 2018-04-02.
  5. "Square rolls out its Square Cash payment service to businesses". The Verge. Retrieved 2018-04-02.
  6. "Square's Cash App payment application now allows users to buy and sell Bitcoin". Digital Trends. 2018-02-01. Retrieved 2018-04-02.
  7. "Square Cash app now lets you easily buy and sell Bitcoin from iPhone". 9to5Mac. 2018-01-31. Retrieved 2018-04-02.
  8. Kleinman, Jacob. "How to Buy Bitcoin With Square Cash". Lifehacker. Retrieved 2018-04-02.
  9. Peters, Jay (2019-10-24). "Square's Cash App officially adds free stock trading, starting at $1". The Verge. Retrieved 2021-11-03.
  10. Weil, Dan (2020-11-25). "Square to Buy Credit Karma Tax for $50 Million, Expanding Reach". TheStreet. Archived from the original on 2020-12-06. Retrieved 2020-12-20.
  11. "Square's Cash App opens up to teens ages 13 to 17 with parental oversight". TechCrunch. 3 November 2021. Retrieved 2021-11-04.
  12. "Tech executive Bob Lee, founder of Cash App, dead after apparent stabbing attack in San Francisco". CNN. 5 April 2023. Retrieved 2023-04-07.
  13. "Sending and Receiving Payments". cash.app. Retrieved 2023-08-02.
  14. "Square's Cash app now supports direct deposits for your paycheck". TechCrunch. 8 March 2018. Retrieved 2021-11-01.
  15. Kulp, Patrick (2017-06-28). "People are getting creative with Square's customizable cash card designs". Mashable. Retrieved 2021-11-01.
  16. Salinas, Sara (2017-11-16). "Square Cash users can now withdraw money from any ATM with their Cash Cards". CNBC. Retrieved 2021-11-01.
  17. Rey, Jason Del (2017-05-04). "Square is rolling out its first debit card". Vox. Retrieved 2021-11-01.
  18. "Official Cash App Tweet About Direct Deposits". Twitter. Archived from the original on 2018-03-08. Retrieved 2021-11-01.
  19. "Paper Money Deposits".
  20. "Square's 'cashtags' turn a custom web link into a tip jar". Engadget. Retrieved 2021-11-01.
  21. John, Steven. "How to send money on Cash App on your iPhone or Android". Business Insider. Retrieved 2021-11-04.
  22. "What is Your Cash App Limit and How to Increase It". Wise. 2021-05-28. Retrieved 2021-11-01.
  23. "Using Cash App For Bitcoin". Square. 29 November 2018. Retrieved 2023-06-04.
  24. "PayPal Is Planning to Offer a Super App with Fintech Services like Crypto, Payments, Investing, Rewards Accessible via Common Interface". Crowdfund Insider. 2021-02-13. Retrieved 2021-11-01.
  25. "Square (SQ) - Market capitalization". companiesmarketcap.com. Retrieved 2021-11-02.
  26. Taylor (2016-02-11). "Free vs Paid Apps: Pros & Cons". AppInstitute. Retrieved 2021-11-03.
  27. "Cash App Revenue and Usage Statistics (2021)". Business of Apps. 2020-09-02. Retrieved 2021-11-03.
  28. "Keep your money and account safe on Cash App". cash.app. Retrieved 2021-11-03.
  29. nelson, Brooke (2021-07-03). "5 Common Cash App Scams and How to Avoid Them". Reader's Digest. Archived from the original on 2021-07-04. Retrieved 2021-11-03.
  30. "How to use PayPal Buyer Protection". CHOICE. 2021-06-03. Retrieved 2021-11-04.
  31. Wilson, Diane (2021-05-25). "Complaints against Cash App skyrocket during COVID-19 pandemic". ABC11 Raleigh-Durham. Retrieved 2021-11-02.
  32. Wilson, Diane (2020-12-11). "Raleigh man loses $24K in Cash App scam | Here's how the scammers fooled him". ABC11 Raleigh-Durham. Retrieved 2021-11-02.
  33. Keane, Isabel (2021-10-08). "Online scammer fabricates backstory on Waffle House worker carrying baby". Metro. Retrieved 2021-11-02.
  34. Morse, Jack (2017-07-11). "Millennials, stop using Venmo to buy drugs". Mashable. Retrieved 2021-11-04.
  35. Davis, Phil (24 June 2021). "Seven people charged with running 'CashApp' drug trafficking ring in West Baltimore, police say". baltimoresun.com. Retrieved 2021-11-04.
  36. Hale, Kori. "Hip-Hop's Role In Square's $40 Billion Cash App Business Success". Forbes. Retrieved 2021-11-02.
  37. "Hip-Hop Loves Cash App, and That Might Be Why Jack Dorsey Bought Tidal". GQ. 2021-04-12. Retrieved 2021-11-02.
  38. Long, Le Van Tuan (2020-06-02). "How Cash App Grew 60% Each Year With Viral Influencer Marketing". Medium. Retrieved 2021-11-02.
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