Cash App Vs. Coinbase: Which Is Better Digital Wallet?

cash app vs coinbase

Seasoned traders and beginners alike often aren’t sure if they picked the right crypto exchange for their needs. For that reason, we’re having a look at how Cash App and Coinbase compare. 

Both apps are super popular and have tens of millions of users around the world. Before we dive into their history, ease of use, pros and cons, and fees, here’s our short verdict:

If you’re only looking to invest in Bitcoin, then Cash App will be the best choice, especially if you already have a Cash App account. For more choice and a better understanding of cryptocurrencies, head over to Coinbase and join more than 60 million other traders around the world. 

cash app vs coinbase

About

Cash App 

cash app

Cash App is a digital bank and a P2P mobile payments service, available only in the US and the UK. You can use it to receive and send money to other Cash App users but also all other personal or business users and institutions. 

In recent years, Cash App has also been known as a beginner-friendly way to buy Bitcoin. It takes only a few taps on the app, and you’ve invested in BTC.

Personal users and business owners alike use a unique username to send and receive money, known as a $cashtag. 

Read more in our Cash App review.

Coinbase

Although Coinbase isn’t the largest crypto exchange in the world, it’s arguably the most well-known, at least in the mainstream. You can buy, sell, send, and spend more than 80 cryptocurrencies. 

If you have crypto in your Coinbase wallet and you’re willing to spend some of them (and not hodl), you can use their Visa debit card that is funded by your balance, just like a digital bank account.  

History

Cash App 

cash app

Cash App was called Square Cash when it was launched in 2013 by Square, Inc. It’s a brainchild of Jack Dorsey, the founder of Twitter, and Jim Mckelvey who previously owned a small glass-blowing business. 

The idea for Cash App actually came to them when McKelvey couldn’t accept credit cards in his business and would lose sales if customers didn’t have cash on them. 

In March 2015, the company rolled out Square Cash for business that is now a popular POS and online banking and payment platform for taking customer payments in person and online, of course.

In January 2018, Square launched bitcoin trading on the Cash App that is now one of its most popular features.

“Instant buying (and selling, if you don’t want to hodl) of Bitcoin is now available to most Cash App customers. We support Bitcoin because we see it as a long-term path towards greater financial access for all. This is a small step.” Jack Dorsey, Jan 31, 2018

Square’s headquarters are in San Francisco, California, with offices worldwide and more than 5,000 employees.

Coinbase

Coinbase Global, Inc. was founded in 2012 by Brian Armstrong and Fred Ehrsam and is now the largest crypto exchange in the US (by trading volume).

If you thought the company name is just a clever word game, it’s not. It’s actually named after coinbase transactions – special transactions introducing cryptocurrency into circulation in proof of work cryptocurrencies.

Already in 2014, the company had more than one million users and started expanding by acquiring smaller businesses and partnering with Expedia, Time Inc., Overstock, and others, allowing them to accept bitcoin payments.

The same year, Coinbase also added bitcoin payment processing abilities to Stripe, Braintree, and PayPal.

Since May 2020, the company no longer has official headquarters but operates remote-first. Coinbase has more than 1,200 employees.  

Fees

Cash App 

cash app
  • No fee if using a debit card or bank account
  • 1.5% for instant transfers
  • 3% for sending funds using a credit card

Cash App doesn’t have explicit fees written down anywhere, despite having a bitcoin fees page that recognizes both a trading fee and an occasional bump when the price is very volatile. Strange, but it is what it is. 

Coinbase

Card fee:

  • 2.49% transaction fee for Coinbase Card

Trading fees:

  • Flat fee:
    • $10 or less: $0.99
    • More than $10 but less than or equal to $25: $1.49
    • More than $25 but less than or equal to $50: $1.99
    • More than $50 but less than or equal to $200: $2.99
  • Percentage:
    • U.S. Bank Account: 1.49%
    • Coinbase USD Wallet: 1.49%
    • Debit Card or PayPal: 3.99%
    • Instant Card Withdrawal: Up to 1.5% (minimum $0.55)

Deposit fees:

  • ACH Transfer: free
  • Wire Transfer: $10 ($25 outgoing)
  • PayPal : 2.5%

As you can see, Coinbase has an extensive and costly fee system in place. You have to pay a spread fee and the Coinbase fee. Coinbase’s spread equals about 0.50% of your crypto sales and purchases. However, it can fluctuate based on the market, and it can go even higher. 

The Coinbase fees also vary, but you’ll pay either a flat fee or a percentage fee, whatever is higher. 

The Coinbase Fee can also vary, depending on your payment method, location, and other factors. It may be either a flat fee or a percentage of your transaction, but it will always be the greater between the two.

Pros and cons

Cash App Pros

  • No monthly fees
  • No transaction fees
  • No foreign exchange fees
  • Boosts
  • Free debit card
  • Ease-of-use
  • Stock trading
  • Bitcoin trading

Coinbase Pros

  • Much better choice of crypto
  • Easy to use compared to other crypto exchanges
  • Low minimums
  • Coinbase debit card
  • Free crypto as rewards
  • Among the safest wallets
  • FDIC insured

Cash App Cons

  • Money not FDIC insured
  • Spending limits
  • Bitcoin fees
  • Withdrawal limits
  • Limited functionality
  • Vulnerable to scams

Coinbase Cons

  • User doesn’t control wallet keys
  • High fees
  • Meager customer support

Security

Cash App 

cash app

Cash App has a few things going against it; the deposits aren’t insured by the FDIC, and the platform is full of scammers

Because Square Inc. doesn’t have a banking license, your Cash App deposits aren’t insured if anything happens with the company. And the fact that the app is so popular has attracted scores of bad people and scammers preying on regular Joes. 

In our opinion, the app shouldn’t be used as a place to store large sums of cash. It wasn’t designed to be used as such anyway.  

Coinbase

We often read that crypto exchanges are hacked, with often hundreds of millions of dollars in cryptocurrency stolen. It doesn’t give you much confidence to go into crypto trading, does it? But again, you shouldn’t view crypto exchanges as places to store your tokens or fiat. 

You should definitely withdraw funds away from the exchange, including Coinbase, when you’re done trading. Of course, it’s more hassle, but at least it gives you peace of mind.

That being said, Coinbase is generally secure, and they probably invest large sums of money into cybersecurity. Especially now that the company is publicly traded on the NASDAQ.  

USD cash balances are covered by FDIC insurance, up to a maximum of $250,000, but your crypto isn’t as it’s not recognized as a legal tender by the government. 

Ease of use

Cash App 

cash app

Cash App is extremely easy to use and is very beginner-friendly, and makes day-to-day banking and even stock and bitcoin trading run smooth. Transfers are fast and straightforward, you can get a physical card as well if you need one, and everything just works.

Coinbase

Cryptocurrency exchange doesn’t roll off the tongue, does it? And the first association for a regular person surely wouldn’t be ease of use, would it? 

Yet, Coinbase has managed to make it work seamlessly and mostly without hiccups. Buy, sell, send – it’s all easy to do in the app or on the big screen. Learn all about crypto, and even earn some free tokens. 

Yes, some people’s accounts do get frozen, the customer service can be hard to reach, but when you couple the fact that the platform has more than 60 million people on board, it seems understandable. For the vast majority of people, the system works flawlessly, and that’s what we like to see.

Available Cryptocurrencies

Cash App 

cash app

You could say that Cash App is a one trick pony, as it only has Bitcoin in its portfolio available to buy, sell, or send. Because it only offers BTC, it’s super easy for beginners to get into trading. 

Coinbase

Coinbase is a full-fledged exchange and therefore has many more cryptocurrencies available for trading. At the moment of writing this, Coinbase had 87 cryptos in its portfolio. 

Most of the popular tokens are on Coinbase, including Bitcoin, Ethereum, Polkadot, Bitcoin Cash, Cardano, Dogecoin, Litecoin, Stellar Lumens, Tether, and others.  

Sign up and verification

Cash App 

cash app

Opening a Cash App account is easy:

  1. Download the Cash App for Android or iOS, or go to their website
  2. Enter your mobile number
  3. Enter the six-digit code they’ve sent you
  4. Add the card information to link your bank account
  5. Enter your full name
  6. Choose a unique $Cashtag
  7. Enter your postcode

You’ll only need to verify your account if you need to raise the initial limits set out by Square. For instance, Cash App lets you send and receive up to $1,000 within any 30 days. In the UK, it’s £250 per seven days to send and £500 to receive. 

You can increase these limits by verifying your identity using your full name, date of birth, and the last 4 digits of your SSN.

Coinbase

To open a Coinbase account: 

  1. Visit their website and click ‘Get Started’ or download the app for Android or iOS
  2. Enter first and last name
  3. Email address
  4. Password
  5. Click ‘Create account’ or ‘SIGN UP’

There’s an extensive process for verifying your identity and other information. You’ll need to verify your email and phone number and add information from your ID as well as take a photo of it. There are also the following questions that you’ll need to answer:

  • What do you use Coinbase for?
  • What is your source of funds?
  • Current Occupation
  • Employer
  • Last 4 digits of the SSN

Withdrawals

Cash App 

cash app

Cash App allows you to cash out Bitcoin and dollars/pounds. You can choose between instant and standard speeds. Standard speed is free, while instant costs 1.5% (with a minimum fee of $0.25) and is available only to send to your debit card.

You need to cash out at least 0.001 bitcoin to make a withdrawal using the standard speed. Rush and priority withdrawals have no minimum withdrawal amount. 

Coinbase

You can withdraw crypto or fiat currency from your Coinbase account to a bank account, credit or debit card, PayPal, or crypto wallet. There are naturally some fees involved:

  • ACH: free
  • Wire (USD): $25
  • SEPA (EUR): €0.15
  • SWIFT(GBP): 1 

Cards

Cash App 

cash app

You can get a free Cash App debit card with your account if you want to. You can use it to spend both dollars and Bitcoins from your balance. You can also use it to withdraw cash from ATMs. The withdrawals will be free if you get $300 each month in your account via direct deposit.  

Coinbase

With the Coinbase Visa debit card, you can spend your crypto balance worldwide. You can pay with contactless, PIN, or withdraw cash from any ATM. To choose which crypto you will spend with your card, open the app and switch between crypto in seconds. 

There’s no fee to spend USDC, but all other transactions that include cryptocurrency, including ATM withdrawals, will incur a flat fee of 2.49%. It’s because each time you spend, Coinbase will make a sale of your crypto so you can make your purchase in USD.

Other notable features

Cash App 

cash app

If Bitcoin investing isn’t enough for you, you can use Cash App’s stock investing feature. It’s great for beginners as they can invest small amounts into fractional shares. Plus, there are no commissions. There’s also a handy tutorial called “My First Stock”, but there are no other educational and research tools available.   

Coinbase

With Coinbase, you can earn dozens of free tokens simply by learning more about them. This is, of course, subject to availability as free tokens can go out fast. 

At the moment, you can earn $10 worth of XLM, 3$ AMP, $9 COMP, $4 GRT, $3 CLV, and $3 FET. You can do this by enrolling in short courses on the Coinbase platform. The questions are easy to answer, and a course takes only a couple of minutes to complete.

Number of users 

Cash App 

cash app

Cash App has grown considerably in the last few years. The company now has more than 30 million customers and is, in fact, racing to its 40 millionth customer. Of the 30+ million people, more than 7.5 million use the app daily. That’s a remarkable feat knowing that Cash App is only available in the US and the UK.

An active user costs the company only around $5 to acquire and brings in over $45 per user per year in revenue. It’s a great place to be for them.  

Coinbase

Coinbase, on the other hand, has an unbelievable 68+ million verified users as people around the globe discover and start their journeys with crypto through Coinbase. The pandemic helped the company immensely as they had 43 million users in the fourth quarter of 2020. 

#CashAppFriday 

The Super Cash App Friday is a popular campaign that originated on Twitter when groups of people started asking strangers for money via $Cashtags. One day, Square took over, and it began to give away money and attracting more users in the process. It was the perfect marketing gimmick for them, and they didn’t even have to come up with the idea.

People could get $100, $200, $500, or even some Bitcoin by simply tweeting or gramming a more or less compelling reason why they should get some cash from the company. Of course, tweeting your $Cashtag publicly does attract some unwanted attention, as you can imagine. In fact, it invites scammers to try and take advantage of you.

The Coinbase Effect 

This is a popular theory confirmed by research in March 2021 that a cryptocurrency will make serious gains once the news breaks out that the currency is being listed on Coinbase. 

The research looked at the token performance during the first five days following the listing. It confirmed that “Coinbase listings have the highest average return standing at 91%, but also have the widest distribution of ranging from -32% to 645%.” 

Customer Reviews

None of these two apps excel in this regard, at least not on TrustPilot. Although there’s a good chunk of fake reviews, both positive and negative, you can still read between the lines. 

The fact is that both apps have tens of millions of users in the US and worldwide, and for most of them, the apps work as they should.

Cash App 

cash app

Cash App has a 1.2-star rating out of 5 on Trustpilot, with only 3% of almost 3,000 reviewers giving it an excellent mark and 93% a bad one. Most of the bad reviews are connected to poor customer service and scams. 

Coinbase

Coinbase has a 1.6-star rating out of 5 on Trustpilot, with only 9% of 5.500 reviewers giving it an excellent mark and 78% a bad one. Some users report having trouble getting verified, while others have issues withdrawing money and lousy customer service.

Competitors 

Robinhood 

Robinhood is a major player in stock trading, but now you can also buy and sell Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies 24/7 and commission-free. Like stocks, you can buy as little as a dollar’s worth of crypto and grow your holdings over time. 

Revolut 

revolut

Revolut is a digital bank from the UK that’s available in the United States as well. Its trading platform is a welcome addition for somebody looking to invest their money in stocks, cryptocurrencies, or even commodities. It’s a great tool to dip your toes into trading, but for a more serious investing strategy, you’ll have to look elsewhere. 

eToro

etoro

eToro offers commission-free stock, ETF, forex, CFD, and crypto trading for users in the US, UK, EU, Australia, and elsewhere. It’s a popular fintech that was established in 2007. Just like Revolut, it offers social trading, which lets you copy the strategies of other traders. 

The bottom line

Cash App and Coinbase are entirely different animals geared towards distinct users. Folks interested only in Bitcoin will make use of Cash App’s simplicity and speed. Those looking for more variety will definitely want to use Coinbase. 

And lastly, frequent traders will look past both apps and choose a cheaper platform with more features and an even greater variety of cryptos.