There are many digital money transfer apps on the market. These include Venmo, Zelle, Google Pay, Apple Pay, Cash App, and PayPal. However, PayPal and Cash App have the most users in the US.
In this article, we will compare Cash App vs. PayPal and explore the features that make these applications similar or different, as well as the pros and cons that go along with that so that you can confidently pick the best one for your situation.
With ecommerce exploding and it has never been more important to understand the origins of ecommerce either.
Now let’s dive into the different options.
Our Pick: Paypal
Cash App and PayPal are close competitors, each of which appeals to users differently. However, PayPal is ultimately our pick because it has fewer limitations, is more widely available, and is more dependable.
PayPal is the ideal digital money transfer app because it allows you to perform many functionalities for free. You can send money, receive money, make payments, transfer money, and invest in stocks for free domestically, and PayPal fees are minimal for international payments and crypto orders.
The app also caters to your business and offers credit card services while allowing you to transact with people across the globe easily.
About Cash App
Square, Inc. launched Cash App as a digital payment app in 2013. This industry giant has launched many apps to help people with online transactions. It is a top app store performer on Android and iOS devices. With A Cash App account, you can perform four main functions: receiving money, sending money, mobile banking, and investing.
The app allows Cash App users to deposit funds, such as your paycheck, directly into an account. You must own a Cash Card to use Cash App banking. Unfortunately, unlike a regular bank account, depositing money into your account does not guarantee interest, and you cannot write checks.
You should also be aware that the Cash App banking feature does not have federal backing. On the other hand, other recognized banking institutions are covered by the FDIC (the Federal Deposit Insurance Corporation), which ensures you up to $250,000 of the money in your savings account if the financial institution goes under. However, Cash App is actively seeking to get this coverage to improve its safety features.
If you are a US citizen over the age of 18, you can use the investing features too. Cash App requires your date of birth, social security, employment information, address, and other personal information to register for Cash App investing.
- Send money easily with the recipient’s cash tag (the identification number of the recipient’s account), phone number, and email address to send money with the application
- Receive money in the app and withdraw money to your bank account or other linked accounts for free with a 3-day arrival
- Withdraw money instantly to your debit card for a 0.5%-1.75% fee
- A virtual debit card called Cash Card allows you to transfer money from your Cash App balance for other online transactions
- Cash card gives you access to a bank account on the app
- Money can be withdrawn from ATM for a fee of up to $2.50
- Personal and business accounts and investing options are available
- Invest in exchange markets and stocks without commission
- trade or transfer cryptocurrencies to another account
PayPal is a well-known company that allows you to make online payments and send and receive money. In fact, PayPal is the fifth most popular online payment method, followed only by MasterCard, Visa, American Express, and Discover. It is available for Android and iOS and is widely available in many countries across the globe so that you can transfer money from nearly anywhere.
How does PayPal work? To use a PayPal account, you link your debit card, bank account, or credit card and request money when shopping at collaborating stores. Additionally, PayPal has a virtual credit card that allows you to make payments online and will even remove any charges for the service as long as you pay the amount owed on time.
To sign up as Paypal account holders, users need to specify whether they need a personal or business account. You then proceed to input personal details for registration.
- Personal or business accounts are both available for different user needs
- Send and receive money easily online between many countries.
- Transactions are safe and secure with extra security such as email confirmations, two-factor login, and data encryption
- Credit card services where users can use the app to pay for online purchases and make payments later
Similarities Between Cash App vs PayPal
Available in the United States
Cash App and PayPal both operate in the United States and have become successful mobile money applications. The applications are the most popular digital cash transfer apps in the United States.
Instant Fund Transfer
Both applications were launched to serve as alternatives to paper payment transactions. Notably, cash transfers between PayPal accounts are instant; the same is true for Cash App.
Reasonable Transfer Charges
Interestingly, PayPal and Cash App charge similarly to send and receive money domestically, and sending money to a connected bank account is also free for both applications. However, both apps charge a 3% fee to withdraw money to a linked credit card.
Credit & Cryptocurrency Options
PayPal and Cash App have evolved into online credit providers, cryptocurrency-enabled transfers, merchant payment solutions, and investing apps. Currently, both applications offer four main functionalities: sending money, receiving money, receiving deposits, and credit services.
Both Cash App and PayPal help customers invest in stocks and crypto. Cash App provides information regarding stocks and exchange markets to their customers so that they can make good investment decisions. However, only US citizens can transact with cryptocurrency for a paypal account.
Secure Data Encryption
Both applications have high levels of security to ensure that their customer’s money is well taken care of. The two companies use data encryption to protect customers from scams and fraud.
Differences Between a Cash App Account and a PayPal Account
The first notable difference between the two apps is that Cash App is only available for United States and United Kingdom residents. On the other hand, PayPal is available in most countries worldwide.
When comparing the two applications, it is crucial to check overall costs. People must understand upfront charges to avoid losing alot of money in the long term.
For PayPal, the account is free, as well as paying for products online and sending money domestically. Yet all other services offered by the platforms come with a charge. PayPal also charges if the money needs to be converted, instant payments are made to a bank, or when making crypto orders.
Cash App users generally deal with more fees. For Cash App, the free transfers take up to three business days to get into your account. You can get instant deposits with debit cards; however, you are charged up to 1.75% fees. In addition, Cash App offers commission-free trading, and there is no minimum deposit requirement when opening a Cash App investment account. On the other hand, you are charged up to $2.50 to take money out of an ATM using a Cash Card.
For PayPal, there are no charges involved when making payments, especially when using your PayPal balance. However, there are additional charges when there is a currency exchange rate issue.
Making an international payment through the application using PayPal balance, credit cards, and bank accounts, American Express charges a 5% fee up to $4.99. PayPal does not charge for withdrawals from local banks; however, you pay a 1.75% fee for instant withdrawals.
Cash App vs PayPal: Conclusion
Both PayPal and Cash App offer their users many benefits, such as instant transfers, bank accounts, personal accounts, and more. They both offer free services and can help conveniently make money transfers from the comfort of your home, making shopping online easier than ever.
While both apps charge fees for various services, Cash App’s fees tend to be higher for users. Despite a few downsides, PayPal has a long-standing reputation as a dependable app for money transfers. Because of this, our pick is PayPal, but now that you know how the two compare, you are ready to make the right choice for you.
To learn more ecommerce and online payments, check out our ecommerce learning center.
Paul Martinez is the founder of EcomSidekick.com. He is an expert in the areas of finance, real estate, eCommerce, traffic and conversion.
Join him on EcomSidekick.com to learn how to improve your financial life and excel in these areas. Before starting this media site, Paul built from scratch and managed two multi-million dollar companies. One in the real estate sector and one in the eCommerce sector.