Cash App vs PayPal is a battle of the new kid on the block versus the dinosaur. David vs Goliath. From what history has taught us, you should never be complacent. So, has PayPal started to be complacent?
PayPal is still the number one choice for money transfers and online payments despite it not having a shortage of competitors like Square’s Cash App.
Join me to see the differences and similarities between Cash App and PayPal so you can decide for yourself which one to use.
- Easy to register
- Send money to people you know
- Receive money and paychecks up to two days earlier
- Buy and sell Bitcoin and Stocks
- No maintenance fees
- Instant cash transfers available
Cash app was once known as Square Cash. It’s a mobile payments service that enables you to easily send money to other Cash App users in the US and the UK. The app already amassed more than 36 million customers since it launched in 2013.
One of the founders, Jack Dorsey, also founded Twitter and Square Inc, two mega companies.
The app itself is very easy to use and makes seamless money transfers a possibility. More than seven million people also have the Cash App debit card in their pockets.
The Cash App account shouldn’t be viewed as a bank account. Instead, you should only keep small amounts of money in it.
Perhaps the best thing about the app is that you can buy and sell Bitcoin and use the card to pay for things with them as well, which is very rare.
- Personal and business accounts
- Money Pools
- Send money straight to bank accounts globally
- PayPal Purchase Protection
- Buy now, pay later
- Debit card and credit card available
Chances are you’re already using PayPal for online payments or money transfers. This fintech behemoth has been around forever, or so it seems. And, although it’s getting a lot of hate from some folks, it’s still a solid choice for money transfers and shopping. It’s also the owner of Venmo!
I’ve been using PayPal for both personal and business uses for more than 10 years. You can use it effortlessly and safely to send and receive money, pay bills, exchange or hold multiple currencies at once, and much more.
People love to use it because you don’t have to leave your card information all over the web. Choose to pay with PayPal to keep your card info private, especially from little-known sellers.
- No fee if using a debit card or bank account
- 1.5% for instant transfers
- 3% for sending funds using a credit card
- No fee if using PayPal balance or a bank account
- 2.90% + 0.30¢ for sending funds using a credit card
Cash App and PayPal have similar fees for sending money domestically. They also offer free online and in-person payments. They both charge around 3% of the transaction to send money with your linked credit card.
You can easily avoid the fee if you simply use your connected bank account or the funds in your Cash App or PayPal account to send money.
Cash App doesn’t allow you to send money or make international payments. The only exception is the United Kingdom. In that case, Cash App will convert the payment from USD to GBP based on the mid-market exchange rate at the time the payment is created and your recipient will receive the funds in GBP.
On the other hand, PayPal is famous for its ease of making global payments in any currency you want. Basically, you’ll pay 5% if you’re sending international personal transactions with a minimum fee of $0.99 and a maximum of $4.99. If your payment method is a card, it’ll be 5.00% + 2.90% + fixed fee.
PayPal has more fees that we can’t compare to Cash App’s, as Cash App doesn’t offer those functionalities but you can find them online.
Who should use Cash App
Cash App is so easy to use that it’s no wonder it is super popular in the States and the UK. It’s no wonder as Twitter and Cash App have the same founder – Jack Dorsey. Both apps are straightforward and simple without the fluff.
If you also want to invest in stocks and Bitcoin, that’s even better. It couldn’t be more foolproof. If you’re still not sure that Cash App is for you, try asking some of your friends that already have it downloaded; what are their experiences.
Related: Cash App vs Venmo
Who should use PayPal
PayPal is so versatile that it makes sense for a wide variety of people and use cases. You can send and convert money with PayPal, or use one of their card products to pay in-store or online. You don’t even need the card to use PayPal; all you need is an account. They also have an app.
The only thing you have to be wary of is the foreign exchange fees. All that practicality can come with a price, so make sure to check the conversion rate that PayPal is offering you and compare it to something like Wise, formerly known as TransferWise.
Wise generally has more favorable foreign exchange fees than PayPal, so you should invest a couple of minutes into comparing the two before you send a hefty sum of money abroad (if it’s in a different currency).
How to open a Cash App account
Opening a Cash App account is easy:
- Get the app on Android or iOS, or on the website
- Enter the number
- Then the six-digit code
- Type in the debit card information
- Link your bank account
- Enter your first and last name
- Find a unique $Cashtag
- Insert your postcode
- That’s it
How to open a PayPal account
It’s just as easy to open a PayPal personal account:
- Go to their website or download the PayPal app
- Choose ‘Personal Account’
- Select your country and enter your mobile number
- Once you get the code on your phone, enter it
- Fill in your email and choose a password
- Enter your address details
- Add your credit or debit card along with Billing Address
- Press ‘Link Card’
- Confirm your email
Number of users
Cash App has grown to over 30 million users. 7.5 million of them use the app daily. Those are some impressive numbers that a lot older financial companies and even banks would kill for.
PayPal has more than 10 times more customers than Cash App. It’s nearing 400 million users. Some estimates say that 87.5% of online buyers use PayPal. Can you even wrap your head around this fact?
This is the bread and butter for these financial companies—especially PayPal. And while PayPal supports 25 currencies in over 200 countries or regions, with Cash App, you’re only able to send money to the UK, apart from the US, of course.
We already learned in the Fees section that the most expensive way to send money is to use your credit card that’s connected to your account. And the cheapest way is to use your connected bank account or debit card.
You can use both the Cash App and PayPal for traveling purposes. Cash App’s card is surprisingly good for traveling abroad because it doesn’t charge you foreign transaction fees for paying online or instore.
It could cost you a pretty penny nevertheless as a bank might charge you separate fees for their trouble.
With PayPal, you can get credit card points, rewards, and miles on your holiday purchases by linking your credit card to your PayPal account. You also have Buyer Protection that can reimburse some of your holiday purchases as well.
Scams are prevalent on both Cash App and PayPal. They’re basically victims of their own popularity. As so many folks are using them, scammers are attracted like moths to a flame.
For this reason, you ought to only use Cash App to transfer money to someone you know and to officially verified businesses. In the case that you are a victim of a scam, the company won’t give you back the money as their terms outright tell you not to use it to send money to strangers.
The scammers, of course, know about this, and they will use it against you when you’re buying or even selling something on Craigslist and similar websites.
Some of the more “popular” Cash App scams include:
- Pretending to be a customer service agent
- Email phishing
- Phone phishing attempts
- Buying stuff with a stolen card
- Letting someone use your phone
- Sending you money out of the blue
- Giveaway scams
- Cash-flipping scams
- Cash-circle scams, etc.
Find out more about them in our article titled The 10 Most Common Cash App Scams
PayPal gives much more protection to its users with their world-famous Buyer Protection Program. You can rest assured that you’ll get your money back in the majority of cases.
If something’s too good to be true, it probably is. Use your common sense when sending money or buying online and you should be fine.
Your deposits aren’t insured by the FDIC and therefore your money could disappear if a company goes bankrupt, for instance. With PayPal, though, that’s probably not going to happen, and Cash App is owned by Square that has become a well-known and respected company.
Banks are usually insured by the federal institution and all deposits are protected up to $250k. Not in the case of these to fintech companies as they’re not banks.
Cash App offers crypto and stock investing to its users while PayPal offers cryptocurrency investing.
They’re not the best option on the market, but people use them to buy crypto in droves. If you already have installed one of the apps, you might as well try it.
Cash App also supports investing for around 1000 stocks listed on the NYSE or Nasdaq exchanges. Again, there are better options on the market.
Buying and selling Bitcoin is straightforward; you need to tap the Investing tab in the app, press buy or sell, enter the amount, and confirm your pin or touch ID.
Cash App still has no plans that we know of, to support other cryptocurrencies. That’s a shame as it would raise the crypto market as a whole as there was $4.57 billion worth of Bitcoins sold via the app in 2020.
- No fees
- 1.00 – 24.99 USD: 0.50 USD
- 25.00 – 100.00 USD: 2.30%
- 100.01 – 200.00 USD: 2.00%
- 200.01 – 1000.00 USD: 1.80%
- 1000.01 USD +: 1.50%
Cash App offers trading Bitcoin without any fees since March 2021. They previously charged a variable fee on transactions that could go as high as 1.76%.
PayPal, on the other hand, offers four cryptocurrencies:
- Litecoin, and
- Bitcoin Cash
And, as you can see above, they have healthy fees. There’s no fee for holding crypto in your account.
PayPal now has the option to checkout with crypto as well. On eligible purchases, PayPal will automatically make crypto available to you as a funding option, as long as you have enough crypto to pay in full at that time.
If you choose to check out with crypto, PayPal will automatically convert it into USD or other currency at no additional fee. You have to be aware that checking out with crypto is a taxable transaction. You’ll have to report it to the authorities.
Contact customer service representatives through the Cash App or at cash.app/help. You can also contact them by calling 1 (800) 969-1940.
You can also send them physical mail at:
- Cash App
- 1455 Market Street Suite 600
- San Francisco, CA 94103
Once again, no one representing Cash App will ever ask for your sign-in code over the phone, on social media, or through any other means.
Get in touch with PayPal by sending them a message online, or by calling 1 (888) 221-1161.
Be wary of googling any customer service telephone numbers as sometimes the top results belong to scammers trying to get you to call their number.
Cash App and PayPal alternatives
Venmo is a mega popular money transfer app that has low to no fees. Kids love it because it’s like a social media app, displaying emojis and gifs when you send money to someone. But, everyone can see what you’re paying for unless you turn off the sketchy feature.
Zelle has become a huge player as it’s already present in many banking apps because banks save a good chunk of money on processing checks. It’s instant and easy to use.
If you have a Facebook Messenger app, you can already send money to people. It’s also super easy to do; simply open a conversation and choose the dollar sign to transfer money. The best thing is, it’s completely free to use as Facebook won’t charge you for their service (for now).
Google Pay, also known as Google Wallet or GPay, makes it easy to connect your Google account to your bank cards making it convenient to pay for things with your mobile phone. It’s also excellent for sending cash to people via a phone number or email address.
Apple Pay and Google Pay are very similar. Send money or pay for stuff by connecting a bank account or card with it. Send cash with the messaging app.
The bottom line
I’d be surprised if you didn’t have at least one of the apps already installed on your phone. I mean, it’s just so easy to use them and in the case of PayPal, there are endless capabilities. In a way, it’s good to have both apps installed on your phone.