How does Cash App work?

A couple stand next to each other in their kitchen while looking at a smartphone together.Image: A couple stand next to each other in their kitchen while looking at a smartphone together.

In a Nutshell

With Cash App, you can quickly send and receive money, make contactless payments and even invest in stocks or bitcoin. There are no fees to set up your account or minimum balance requirements, but you won’t have the same protections you’d have with most traditional bank accounts.
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If you’re thinking about using your phone to send and receive money, pay for goods and services and even start investing, you may be interested in Cash App.

Cash App, the financial platform owned by Block (formerly known as Square), allows you to bank and make transactions using Apple and Android smartphones and devices. You can use Cash App to send and receive money from your contacts and pay for things at participating merchants.

Contactless payments can be convenient. Plus, there usually are no monthly charges, purchase fees or costs for sending and receiving money.

What is Cash App and how does it work?

Cash App is a peer-to-peer financial platform that lets you send and receive money, make payments to merchants and invest in stocks or bitcoin — all through one app on your smartphone.

You start by downloading the app and creating an account, which involves entering your debit card information and linking your bank account. Then, you’ll pick a $Cashtag (a user name that you can use to send and receive money).

Here are some benefits of Cash App.

Send and receive money quickly

Like other payment apps, you can use Cash App to quickly send and receive money with other people. This can be helpful if you need to split the cost of rent, a restaurant bill or want to pay back a friend you borrowed money from.

You can also cash out — transfer money — from your Cash App balance to your bank account or debit card. Standard deposits are free and take one to three business days to show up in your account. Instant deposits are available in your bank account right away but are subject to a fee.

A Cash Card

A Visa debit card called Cash Card can be used to pay for purchases online and in stores with funds from your Cash App balance.

Your Cash Card can be virtual or physical and comes with other perks like cash boosts, which allow you to save money when used at participating merchants.

Early access to your paycheck

Cash App makes direct deposits like your paycheck available as soon as they are received, which means you may get your money faster — up to two days earlier — than you would from many banks.

Invest in stocks

Cash App allows you to buy and sell stocks and ETFs, or exchange-traded funds. Cash App also offers fractional investing, which means you can buy partial shares of a stock for as little as $1, even if a whole share costs more. Fractional investing can help you build your portfolio with stocks whose full share price may be more than you can afford.

Cash App doesn’t charge a commission on your stock and ETF trades, so you don’t lose money to fees.

Trade bitcoin

Cash App allows you to buy and sell the digital token, or transfer your funds to another mobile wallet on the blockchain. (Cash App charges fees for bitcoin transactions). Keep in mind that bitcoin can be a risky way of investing.

How do you load money into Cash App?

Once you download Cash App, which is available for Android and iOS devices, there are different ways you can fund your account: You can add a bank account to your Cash App profile to transfer funds or you can set up direct deposit using your Cash App routing and account numbers to deposit paychecks and tax returns. (You’re allowed to receive up to $25,000 per direct deposit and up to $50,000 in a 24-hour period).

Cash App also allows youto send and receive money directly from other Cash App users using your $Cashtag or phone number. You can also send a request for a specific amount of money to another user.

How secure is Cash App?

Cash App uses several tools to keep your transactions secure, including …

  • Security locks — Cash App protects your payments by using a PIN, touch ID or face ID.
  • Coin storage for bitcoin — Cash App stores your bitcoin balance in its offline system.
  • Encryption — Cash App has PCI-DSS level 1 certification, which means it’s compliant with payment card industry security standards.
  • Account notifications — You can stay up to date on your transactions and account use with Cash App push notifications, emails and texts.
  • Disable feature — Cash App says you can halt spending by disabling the app.

Is it a good idea to use Cash App?

When it comes to your hard-earned money, it’s important to feel confident about where it’s stored. Here are some things to consider before using Cash App.

  • Cash limits — You can only send and receive up to $1,000 within a 30-day period using Cash App. It’s possible to raise that limit by verifying your identity with your name, birthdate and Social Security number.
  • No minimum balance — You don’t have to keep a minimum balance in your Cash App payment or investing accounts.
  • Service charges and other fees — There are no fees for opening or maintaining an account, sending money, receiving money or stock trades. However, some Cash App services come with fees, including trading bitcoin, ATM withdrawals and instant money transfers to your debit card.
  • Your money may be FDIC insured — Cash App uses partner banks to facilitate transactions. If you have an account with either of these banks and you have a Cash Card, your account balances will be insured by the FDIC. Otherwise, your money won’t be federally insured.

What’s next?

Cash App may be a good option for quickly and conveniently sending or receiving money for day-to-day things like splitting rent with roommates or paying back a friend. There are similar options available, including Venmo, Zelle and Apple Pay.

Keep in mind that while you can store funds in your Cash App account, it isn’t a savings account, which means your money likely isn’t insured (unless you have an account with one of the partner banks) and you won’t receive interest on money you have there.

About the author: Sarah Sidlow is a freelance writer and editor based near Detroit. She has a master’s degree in journalism from Georgetown University. Sarah’s work has appeared in Luxembourg’s national newspaper, Washington City Paper… Read more.