What is the Cash app and how does it work?

Cash may be king, but the kingdom is looking more and more digital. It’s no wonder money transfer and payment apps are so popular, making transfers easy and fast. Cash App stands out from the pack by letting users pay for purchases from selected merchants, invest in stocks and even trade Bitcoin in addition to the peer-to-peer payment service it offers.

CNBC Select examines the app’s features, pros, and cons so you can decide if it’s the right payment app for you.

Cash App is a financial platform that provides services through its banking partners, Lincoln Savings Bank and Sutton Bank. It also offers investment services through Cash App Investing LLC, a registered broker-dealer and member of the Financial Industry Regulatory Authority (FINRA).

Cash App offers the following services and features:

• Transfer money: Users can send and receive money, and transfer the money they have in their Cash App account to a linked bank account. Sending and receiving money is free. Standard transfers also do not charge any fees and take one to three working days to complete. A direct transfer is also an option, but costs 0.50% to 1.75% of the transfer amount, with a minimum fee of $0.25.
• Bank card: Cash App offers a free Visa debit card linked to the user’s Cash App balance. Cardholders can use the Cash Card at ATMs for $2 per withdrawal (unless they set up direct deposit) or to make purchases online and in stores.
• Cash App Pay: Cash app can also serve as a payment method to pay for purchases online or in person at Square Sellers and select sellers.
• discounts: Cash Cardholders have access to Boosts — direct discounts from eligible retailers and restaurants. You can only activate one boost at a time, but you can change which one it is without any restrictions.
• Direct Deposit: Users can deposit paychecks and tax returns into their Cash App account.
• savings: The app allows users to fund savings from their linked payment source or Cash App balance with no fees or minimum balance requirements. Those with an activated Cash Card can also set up Round Ups for Savings to automatically complete card transactions and add the change to the savings balance. Note that the savings feature does not accrue interest, unlike traditional or high-yield savings accounts.
• To invest: Cash App Investing allows users to buy stocks or ETFs with the money in their Cash App account (and a linked debit card if the funds are insufficient for the purchase). Users can also sell the stocks and ETFs they own on the Cash app and the amount of the sale will be added to their app balance. The platform does not charge any commission.
• Bitcoin: Another service that Cash App offers is buying, selling, sending and receiving Bitcoin. Sending and receiving Bitcoin is free, but the platform may charge for buying and selling. In addition, users who have set up direct deposit can choose to set aside a percentage of their salary in Bitcoin.

To use the Cash App you need to download the app, which is available for both iOS and Android. After creating your account, you can link it to your bank account to start using the platform. You can also link your Visa, MasterCard, American Express and Discover debit and credit cards. However, if you use a credit card as a payment method, Cash App may charge a processing fee.

You will also be prompted to create a username. Each individual and company using the Cash App has a username that you use to send or request money. You can also search by name, email address or phone number.

How to add money to Cash app

To add money to your Cash App balance, for example to make a purchase with your Cash Card, go to the ‘Money’ tab on the app’s home screen. Press “Add Funds” and follow the prompts to choose an amount to deposit.

Cash App is a secure platform and uses encryption and fraud detection technology. This means that even if you use the app on public Wi-Fi, any information you submit will be encrypted and securely shared with Cash App’s servers. In addition, the app uses additional security features such as PIN code entry, Face ID and Touch ID.

If you have the Cash Card and hold funds in your Cash App account, the funds are covered by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per customer. Your investment balances are also protected by the Securities Investor Protection Corporation (SIPC).

Even with all the security precautions, it is best to remain vigilant to avoid scams. CashApp payments are instant and generally cannot be canceled or reversed. Only send money to people and companies you trust and check all information before sending money to make sure it goes to the right person. And finally, don’t share personal information such as your login or bank account information with anyone, even if the person claims to work for the platform. Cash App will never ask you for this information or ask you to download an app for remote access or complete any kind of transaction or payment.

With so many features, Cash App has a lot to offer. From sending and receiving money to accessing discounts to buying Bitcoin, it is a powerful financial platform. Moreover, CNBC Select has ranked it as the best payment app for beginner investors thanks to the free investment services it offers.

That said, it has some competitors.

For example, Venmo also offers a ton of features. In addition to sending and receiving payments, you can get a debit card or even the Venmo credit card, buy cryptocurrency – and of course add messages and emojis to your payments. These posts will appear on your friends’ home feeds (unless you make them private), adding to the social aspect of the app.

If you are not looking for extra features and want a money transfer app exclusively for sending money to family and close friends in the US, Zelle is also an option. It offers direct bank-to-bank transfers with no fees – often within your bank’s mobile app.

Cash App is feature rich and can be an excellent choice for individuals and businesses. It’s easy to use and generally safe, but you still need to be careful to avoid scams. If you sign up for the Cash App, make sure you are aware of potential fees, as well as any transaction limits the platform may impose.

At CNBC Select, our mission is to provide our readers with quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Each payment app article is based on meticulous reporting by our team of expert writers and editors with extensive knowledge of payment and money transfer apps. While CNBC Select earns a commission from affiliate partners for many offers and links, we create all of our content without input from our commercial team or outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best products.

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