Paying someone or getting paid by a friend used to be a hassle. It had to be physical, whether it be cash or a check they handed to you. If you had to pay a friend, you might’ve even had to head to their bank in person to deposit funds into their account. Not convenient in the slightest.
Nowadays, peer-to-peer (P2P) transfer apps like Cash App and Paypal have changed the game. You can send and receive thousands of dollars at a time all from the comfort of your own home!
Cash App and PayPal have their own strengths, with Cash App being better for paying friends and introducing yourself to digital banking. At the same time, Paypal is better for the more experienced digital banker who may conduct some business on the side.
Cash App has a growing user base, currently supporting over 44 million users at the time of writing. These users are strictly U.S. based.
Paypal, on the other hand, has 426 million users across the globe, making it one of the largest payment platforms around. It’s actually the number one payment platform in many European countries, including Germany and Austria.
When comparing the two payment platforms, there are three key areas to look at: sending and receiving funds on the platform, spending money through the platform, and investing through the platform.
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Is Cash App Better Than PayPal for Sending and Receiving Money?
While each app has a wide variety of benefits (more on that later), we should start by looking at the main reason any of us use them: the ability to send and receive money.
Whether you’re sending your friends $20 or using an app to pay your landlord rent, most users log into Cash App and Paypal to get paid and pay their friends or family.
Starting with Cash App, they have a lot of benefits for users just looking to send and receive funds.
If you and the person you’re paying use Cash App, you can send them funds instantly. You can send up to $2,500 per week and receive up to an unlimited amount once you verify your information.
Other apps may take a couple of business days to send your money, or may even charge a fee if you want it to get there on time. Cash App doesn’t charge any fees across the board, easily one of their biggest advantages over their competitors.
Transferring money is easy as well. All you need is the other party’s phone number, email, or $cashtag. A $cashtag is a unique name tied to your account, giving other users an easy way to identify you.
Cash App even has verified $cashtags, meaning if you need to pay a business you can see that they’re legitimate right off the bat.
Paypal is a little slower than its competitor here.
Transfers on Paypal take 1-3 business days to reach their intended destination. While it’s a free way to send someone money, why wait when Cash App can send it instantly?
They do offer an instant transfer feature, but that comes at a fee. It’s 1.75% of the total amount of the transfer, up to $25 to send your money instantly.
Cash App beats PayPal here pretty easily. But I don’t want to overlook some of PayPal other handy features.
You can pay people and get paid through an easy-to-use QR code on the app, or they can look you up through PayPal before verifying it’s you and sending money. You can even create a fun and unique username to give people an easier time locating you (I’m @paybranson if you want to send me money, I won’t object).
You can request funds too. If the first of the month is coming around and you live with forgetful roommates, you can send them a quick request with a specific dollar amount. All they have to do is hit accept and voila, the funds are transferred and rent is paid.
Overall, I’m going to give this category to Cash App. Its free transfer system can send your money in an instant, while Paypal charges to do the same thing.
What is the Better App for Spending Money, Cash App or Paypal?
Another new feature of these online banks/ fintech companies is the ability to spend money directly through them. This can come in a couple of ways, either with a debit card issued through the app or using them when checking out online.
While Cash App is definitely better than PayPal for sending and receiving money, this comparison is much more competitive.
Cash App has an entire marketplace on their app. While you can’t purchase items directly, you can redeem discounts to a huge base of stores and shops, both local and international!
This was a huge surprise for me; I always pictured Cash App as a very basic P2P transfer system. The discounts usually aren’t much, between 1%-13% off, and they have limits as to how much you can purchase through the discount.
To be completely honest, I would only ever use the discounts if I was already going to that store — a 1% discount doesn’t exactly sway my decisions.
Luckily, Cash App goes beyond basic discounts with their spending section. They also offer Boosts, more discounts at places you already shop. If you have the Cash Card, Cash App’s debit card, you can choose a Boost related to a section of your spending.
If you love swinging by your favorite coffee place for a cappuccino, you can choose “coffee” as a boost, knocking off a percent or two off of a purchase you were already planning on making!
I want to touch on the Cash Card too, as it is a pretty fun way to spend your money residing in your Cash App account.
The Cash Card is completely designable, giving Cash App customers a unique way to spend their money. You can use the Cash Card to make purchases or you can just scan the QR code within the app.
You can also use cash with the Cash App! They partner with a group of ATMs so you can withdraw physical cash. If you’re looking to make a deposit, you can head to 7-11, Walgreens, Walmart, and other stores to do so.
Simply show the cashier your Cash App barcode and they’ll make the deposit for you!
PayPal also makes a strong claim when looking to be the number one digital banking app to spend money on.
While they don’t have any Boosts like Cash App, they are partnered with Honey, now known as Paypal Honey. Paypal Honey is a browser extension that aggregates a bunch of coupon codes found on the internet, giving its users an easy way to find the best deals on the web.
You can even send gift cards through PayPal. If a holiday or birthday is coming up and you want to send your video game loving nephew a more thoughtful gift than cash, PayPal will let you send him a nice GameStop or Roblox gift card.
Paypal has a diverse user base, ranging from personal use to business. Not only can your friends pay you on the popular payment platform, your customers can too! Paypal facilitates payment between business owner and customer gracefully, giving users even more reasons to log in.
Overall, I’d say this one is a tie. Paypal and Cash App both have strong marketplaces for users to get great deals. Cash App has boosts you can personalize while Paypal is partnered with Honey, bringing all the discounts the internet can offer.
Can You Invest with Cash App or is Paypal Better?
Cash App is much more than a P2P transfer platform — if that wasn’t clear already. Not only can you look for discounts and Boosts from your favorite stores, you can also invest!
Cash App lets their customers buy, sell, and even send and receive bitcoin and stocks. When my grandfather gave me stocks for my tenth birthday, he handed me a piece of paper representing my shares. Now, you can send them with the click of a button!
This is where the real differences between the apps show. Cash App only offers bitcoin as the sole cryptocurrency on their platform, and offers stocks in lieu of other crypto coins like Ethereum or Dogecoin.
As an ex-banker, I know the importance of investing. One of the worst parts of investing is how intimidating it can be to those who haven’t gotten the chance to learn about it. Cash App eliminates this stigma by allowing their customers to invest as much — or as little — as they want.
One of my favorite features that Cash App has is their round up feature, rounding up your last transaction to the next dollar amount and putting those funds into bitcoin or other stocks.
For example, if your favorite sandwich costs $9.40, Cash App will charge your account $10 and send $.60 to the investment of your choice!
I think this is a great way to give anyone an easy introduction to investing. You don’t need thousands of dollars, just some spare change invested into your favorite companies or bitcoin.
You can also send your friends and family stocks and bitcoin! That’s another easy way to get into investing — or get someone else into it.
You can send your friend $50 worth of Apple stock and watch it rise. You could even send a single dollar’s worth of bitcoin, the possibilities are endless.
From bitcoin to ethereum, Paypal customers have a lot of options when it comes to crypto.
Like Cash App, however, you can send these crypto coins to other users on Paypal. There aren’t any stocks though, so it’s really up to you how you want to approach investing and what you want to invest in.
What Paypal has that other Apps on this list don’t have, is an incredible savings account. I’m not kidding, Paypal’s interest rates on their everyday savings accounts are easily the best I’ve ever seen in my years of banking.
Currently, I have 3.75% interest on my savings account at Paypal. That account is completely liquid too, meaning I can withdraw some or all of my money at any time with no penalty.
To put that in perspective, Chase Bank is currently offering a CD (certificate of deposit) with a 3% interest rate for a minimum of 12 months. They require at least $1,000 to even open the account.
So, for a whole year, you can’t move a penny without penalty and the interest rate is lower than Paypal’s savings account! (As an ex-banker, this may be much more exciting to me than it should be).
In short, you don’t need to have investments on Paypal to get investment-like returns. I love their savings accounts and am slowly moving my funds over there to grow more than they ever could anywhere else!
If you’re looking to dive into investing with either Paypal or Cash App, it depends on how much time you want to invest.
If you’re looking to throw some spare change into a savings account without paying much mind to it, I’d recommend Cash App. It’s a lot better for the casual investor who is just beginning their road to retirement.
If you want to take investing seriously, I’d recommend Paypal. Outside of investments like stocks or cryptocurrencies, Paypal has some of the best savings accounts in the world as well.
Cash App Vs. Paypal, Which is Better for You?
If you’re looking for the best app to send money to your friends instantly, look no further than Cash App. It’s completely free and you’ll receive the funds sent to you just after the payee hits send on their phone.
Paypal is lacking in this category, charging their users a fee to send funds instantly. If you want to send money for free on Paypal, you’ll have to wait 1-3 business days to complete the process.
If you want your transfer app to be more than a transfer app, allowing you to spend money and access unique discounts, Paypal may be the app for you. They are partnered with Honey, one of the internet’s largest discount aggregators.
Cash App deserves a shout in this department too, but they require you to get one of their debit cards if you want to receive discounts.
Lastly, for current and future investors alike, Paypal and Cash App are good areas to start/ continue your journey.
Paypal, in my opinion, edges Cash App out in this area. I like investing through Paypal as it seems to be engineered for those of us who want a little bit more out of our investing apps.
More Useful Articles About Digital Banking
- 3 Easy Ways to Send Money from PayPal to Cash App
- How to Receive Money On Cash App Without a Card (Solution)
- 8 Simple Steps to Send Money From Cash App to Venmo
- How to Convert Swagbucks into Cash App (Workaround)
- Cash App Vs. Venmo (What is Better Mobile Payment App?)
- Cash App Vs. Zelle (The Apps That Serve Different Purposes)
