Posted by Cash App business account can help you take your online business to a whole new level as an ecommerce entrepreneur, freelancer or otherwise – learn ow here.
What is Cash App?
Owned by Block (the fintech company formerly known as Square), Cash App allows users to send and receive money virtually, make online and in-person payments, and invest in stocks and cryptocurrency. It’s best known for its peer-to-peer payment functionality, which competes against significant players like Venmo and PayPal.
Cash-App launched in 2013, providing a convenient way for users to send and receive money without going through a bank or wire service. In the years since, it has expanded its offering and now provides other services like Cash App-connected debit cards, support for direct deposit, and an investment platform. Users also have access to cashback offers (called “Boosts”) from retailers and restaurants like McDonald’s, Walgreens, Walmart, and Whole Foods. As its name suggests, Cash App is primarily a smartphone app available on the App Store and Google Play. It’s also accessible through browsers like Chrome and Safari.
Aside from transferring money, Cash App will provide you with a bank account and a debit card, which you can use at any ATM. You can even invest in stocks and Bitcoin through the app. Some of these services are free, while others require a fee. There’s a significant downside here though; your Cash App balance is not FDIC-insured, so there’s no guarantee that you’ll get your money back if something goes wrong.
Despite intense competition in the peer-to-peer payment industry, the addition of Cash App has been great for Block. The company reported a billion-dollar bump in revenue between 2017 and 2018. It has also surpassed Venmo in number of downloads, with 33.5 million cumulative downloads.
As of the end of 2021, Cash App boasted 70 million active users and $1.8 billion in gross profit. As of Q1 2022, Block, Inc. has a market capitalization of $78.5 billion. In an era where smartphones are ubiquitous and consumers are willing to pay for convenience, people increasingly rely on digital wallets. Payment-to-Payment applications are on the rise, but the competition is intense. Cash App has to compete with PayPal, with its larger market capitalization of $138 billion {as of Q1 2022}. Cash App also has smaller competitors, including Apple Pay and Google Pay, which come pre-installed on iPhones and Android phones. For Cash App to stand out, it needs to continue to roll out exciting new features that attract new users.
In the third quarter of 2019, Cash App accounted for more than 25% of Square’s revenue. Some experts predict that Cash App’s growth could shortly challenge PayPal’s Venmo application. For now, Cash App’s user base stands at 24 million, while Venmo’s user base is approximately 40 million. When Square was founded in 2009, it started with a product that gave small businesses the capability to accept credit card payments. The company expanded to create an ecosystem of financial technology products that make it possible to manage a business using exclusively Square products. With Cash App, Square attempts to create a similar financial technology ecosystem for individuals. The Cash App ecosystem could replace a bank account for an individual in the future.
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Related article: All You Need to Know About Seller Fulfilled Prime.
Cash App For Business versus Personal Accounts
| Cash App business account | Cash App personal account |
| Receiving money with a Cash App business account has a transaction fee. | There is no fee attached to receiving money on a Cash App personal account. |
| There’s no limit to the amount of money you can receive with a verified business account. | Cash App lets you send up to $250 within any 7-day period and receive up to $1,000 within any 30-day period. |
| Business account owners get a 1099-k form to report taxes. | Personal account owners do not get a 1099-k form to report taxes. |
| Cash App for business account holders can create a ‘cash. me’ payment link that is sharable via SMS, email, WhatsApp, or hyperlink it to their site and use it as a payment gateway. | This feature is not available for Personal account owners. |
You can have both a Cash App business account and a personal account simultaneously, but each account requires a different phone number.
What is Cash App for Business? – Cash App Business Account
A Cash App business account allows merchants to make sales through Cash App while remaining within the good graces of the terms of service and law. It has the following characteristics:
- Unique payment links and Q.R. codes can be used to initiate a transaction
- Allows you to accept peer-to-peer {P2P} Cash App payments
- No limits on the amount of money you can receive
- Allows you to accept payments through Visa, Mastercard, American Express, and Discover networks.
Cash App for Business fees
Suppose you’re accustomed to peer-to-peer transaction apps being free. In that case, it may be a little disappointing to hear that Cash App for business has transaction fees and the optional fees personal accounts pay for expedited bank deposits.
Here are the fees for Cash App business accounts:
- 2.75% per transaction
- 1.25% fee{minimum $0.25} on instant deposits
Cash App business is less about getting unique features than complying with terms of service. More importantly, as of 2022, services like Cash App are required to report commercial transactions totaling more than $600 in commercial payments annually to the IRS. Moving forward, there will be greater scrutiny of transactions from now on.
Cash App Business Account limits
With its origin in P2P transactions, Cash App wasn’t envisioned as a high-volume transaction platform. To use Cash App for more than just an occasional small sale, you will need to get a verified account. The limits work like this:
- $7,500 sending limits a week and $17,500 per month with a verified account.
- There is no limit on the amount you can receive.
- $25,000 per week on cashouts
- Unverified accounts can do $250 worth of transactions a day and $1,000 within a 30-day period.
You can access the lists of limits within the app by tapping on the account setting icons in the upper right corner, then tapping on Limits.
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How To create a Cash App Business Account
Creating a Cash App business account is pretty easy.
- Download Cash App and create a personal account.
- Tap the icon in the upper right corner within the app that looks a bit like a person. This will bring up your account information.
- The top submenu should say “Personal.” Tap on that. You’ll find your details there. Scroll to the bottom, and you should see the option to Change Account Type. Tap on that.
- You should see something like the screenshot below, which discloses the transaction fee if you’re in the right spot. Tap on Change The Account.
- Accept the confirmation
- If you haven’t already, you will have to link a bank account to your Cash App. You can do this by selecting Linked Banks and following the instructions within.
(Note that you can verify your account before converting your personal account to a business account).
The first time you try to exceed the limits of an unverified account, you’ll be prompted to verify your account. You’ll then be asked to submit personal information, including your full name and Social Security Number.
How To Set Up and Use Cash App For Business Transactions
You don’t have to do anything special to get Cash App ready for business transactions as an ecommerce entrepreneur, freelancer or otherwise.
Cash App works through payment links and Q.R. codes, which means that you and other Cash App users will be able to initiate transactions by having one party scan the other’s Q.R. code. If you don’t want to hold up your phone for every customer, you can print this code out for them to scan instead.
The good news is that your customers don’t have to have Cash App to pay you. You can generate a payment link {your $cashtag} that you can text, email, message, or embed in your website. This link will take them to a “Cash.me” page where they can either log into their Cash App or enter their name and email address along with their credit or debit card information.
Accepting Cash App Payments Without A Business Account
Cash App used to live in its own little silo apart from the rest of the Square ecosystem, but that’s no longer the case. If you use Square as your payment processor, you may be able to accept Cash App payments without a Cash App business account. Cash App is enabled as a payment method by default when you’re using a compatible Square program. This feature can be toggled off, however, if you’d prefer not to accept Cash App.
The following Square products can accept Cash App:
- Square Register
- Square Stand
- Square Terminal
- Square Online
- Square POS app for mobile devices
Cash App’s business applications are narrow but powerful. For businesses that make infrequent and minor transactions, Cash App is an excellent convenience. Think about your dropshipping business or flipping endeavors as well.
You’ll be able to take Cash App and credit card transactions with minimal fuss and no hardware expenditures outside of the mobile device you’re already using. The flat 2.75% transaction fee recalls the old days of Square; with no flat markup, it’s possible to make minimal transactions economically.
That said, Cash App is extremely limited. It offers the ability to take payments, and that’s about it. Cash App will send you a 1099-K form if you do over $20,000 in transactions in a calendar year (less if you’re based in Massachusetts, Vermont, Maryland, Washington D.C., or Illinois). Beyond that, you’re responsible for taxes and keeping track of transactions. Add in the limits for spending and cashing out money, and you have a tool that isn’t suitable for high-volume businesses.
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Cash App Business Account Pros and Cons
| Pros | Cons |
| Payments through Cash App are encrypted on both ends. Additionally, the app uses the same security protocols as the major credit card companies. Therefore, transferring money through Cash App is “no less secure than using a credit card.” | Although Cash App offers more services to business accounts vs. personal accounts, they don’t offer business management services. As a result, business account holders won’t be able to track or schedule payments. The app can only be used to send and receive money. |
| Business account holders can create payment links directly in the app. | To transfer funds out of your business account, you’ll have to link your Cash App account to your bank. |
| Transaction fees: Compared to other payment service providers, Cash App has competitive fees. | As with most technology, there is a chance that something may go wrong. Unfortunately, if you encounter a problem with your account, you can only reach Cash App’s customer support through the app’s messaging service. Cash App does not offer live chat or phone support. |
Cash App Personal Account: Pros and Cons
| Pros | Cons |
| In addition to secure transactions, Cash App also has safety measures to protect against unauthorized users accessing the app. Many of the functions within the app will require a PIN code or two-factor authorization. | Cash App customer support can only be reached through the app itself. As a result, this can pose a problem for users who are seeking help via live chat or phone. |
| Cash App’s interface and platform are geared towards personal users. The app allows users to monitor their payment history and balance. | A $1,000 monthly limit on how much money can be obtained. |
| Cash App is likely not suitable for advanced investors, but newbies can use the platform to invest in stocks and crypto, such as Bitcoin. Cash App is a member of the Financial Industry Regulatory Authority and Securities Investor Protection Corporation as a broker-dealer. | Verified users have a $2,500 weekly limit. Unverified users have a $250 limit. |
| In addition to transferring funds, you can use Cash App as a bank account. You’ll be given an account and routing number. Additionally, you can set up direct deposits for your paycheck. The deposited funds can then be used to pay bills. Like a debit card that is linked to your bank account, Cash App also offers card services. Users can use the Cash Card for online or in-store purchases. | Cash App’s Cash Card has a spending limit of $7,000 per day and $10,000 per week. Additionally, there is a $25,000 limit per month. The Cash Card allows cashback; however, the daily and weekly limit is $1,000. |
Cash App Safety Questions
Should You Buy Bitcoin on Cash App?
Apps like Cash App, Venmo, and Robinhood make it easier than ever for people to buy Bitcoin and other cryptocurrencies, but there are good reasons to proceed with caution before you do. For starters, cryptocurrency is a relatively young asset class compared to conventional stocks, contributing to its highly volatile value and big price swings by the day and even by the hour. Experts say it’s wise to keep crypto investments to less than 5% of your portfolio and make sure it doesn’t get in the way of saving for emergencies and paying down high-interest debt. And while apps like Cash App tends to be easier to use, mainstream cryptocurrency exchanges come with more features and industry-leading security measures that protect investors’ crypto.
Fraud Protection – how Cash App protects your transactions and funds
Cash App payments are encrypted and most transactions processed instantly. Usually, payments cannot be cancelled once the money is sent. This definitely leaves no room for fraud and other crimes of social engineering.
Third-party apps like this, although they may be PCI-DSS compliant and encrypt all of their data, still put the responsibility on the user to make sure they use strong security and privacy practices for protecting their account. In addition, as with any internet-based technology, Cash App is susceptible to sniffing attacks. For example, if someone claims to help and asks you to share your screen, do not do it. Anyone qualified to help will walk you through the steps without ever asking for a screen share or login credentials.
Cash App alternatives
When it comes to Cash App’s main functionality {peer-to-peer money transfers}, the company’s main competitors are Venmo, Zelle, and Paypal. Here’s how it stacks up against each of these services:
1. Venmo: For the most part, this PayPal-owned app is pretty similar to Cash App. Both platforms allow users to pay and request money from others, use a debit card, set up direct deposit, and make online and in-store payments. However, Venmo does offer social media-like functionality {such as likes and comments on payments} and purchase protection-but it is only available in the U.S.
2. Zelle: Zelle works directly with central banks{including Chase, Wells Fargo, and Bank of America} to process same-day payments between its users. If you bank with one of its partners, you can make payments directly from your online banking account, so there’s no need to download the Zelle app.
3. PayPal: It was established nearly 25 years ago. PayPal rules the online payment space. It includes far more bells and whistles than Cash App, including the ability to make international payments, create and send business invoices, and pay for purchases in installments.
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