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How Does the Square Cash App Work?
Square Cash makes it easy to send money for free with the peer-to-peer (P2P) Cash App. Unlike a bank transfer, you don’t need much information to send money. If you have an email address, phone number, or $Cashtag, which is the unique ID for a person or business, you’re good to go.
Once your account is all set up, it’s easy to send and receive funds. This comes in handy if you want to split the cost of a night out with friends, or you’d like to pay someone for setting up your new home network. You can share your $Cashtag with others to get paid, send them a request for a certain amount, or they can send you funds using your email address or phone number. To send money, all you need to do is:
- Log in online or to the Cash App, similar to a mobile banking app;
- Enter the amount you’d like to send;
- Tap on the “Pay” button;
- Enter the person or company’s email address, phone number, or $Cashtag;
- Type in what the payment you’re sending is for;
- Tap on the “Pay” button.
You have a few options when you’re ready to access your funds:
- Cash Out to bank account: Tap on “Balance” on the Cash App home screen, tap “Cash Out,” choose the amount you’d like, select the deposit speed (Standard for two to three days or Instant for a 1.5% fee), and confirm the transaction using Touch ID or your PIN. The funds will be deposited into your bank account through the linked debit card, such as a checking account.
- Apply for a free Cash Card: The Cash Card is a Visa debit card linked to your Cash App account so you can use it to pay anywhere Visa is accepted.
- Get cash back at stores: Choose “debit” at checkout, enter your PIN, and enter the amount of cash you’d like.
- ATM withdrawals: If you receive at least $50 of your paycheck or benefits through direct deposit into your Cash App account, you can make up to two free ATM withdrawals per day. Otherwise, it’s $2 per ATM withdrawal.
Square Cash Services
Besides the ease of sending money between friends and family, there are other services worth checking out.
You can use Square Cash to send and receive payments to a business in the same way you would to an individual. This may open up possibilities so you can pay your landlord or your favorite retailers using Cash App. It’s free for the user — businesses pay a 2.75% processing fee to accept Cash App payments.
Square Cash Safety
The ease of sending nearly anyone instant cash could raise alarm bells, but it’s pretty secure. The only account information Cash App has is your debit card details — you don’t have to provide much of your personally identifiable information as you would to open a bank account. Here’s how Square Cash keeps you and your money safe:
- If you’re not connected with the person sending you money, you have the option to accept or decline the funds;
- ATM withdrawals are limited to $310 per withdrawal and $1,000 per day;
- You can pause your Cash Card instantly;
- You can opt-in for notifications any time there’s activity on your account;
- You’ll need to enter a PIN, Touch ID, or Face ID on your device before sending cash;
- Your payment information is encrypted to be Payment Card Industry Data Security Standard (PCI-DSS) Level 1 compliant;
- Bitcoin balances are kept offline;
- Square Cash monitors for fraud.
Benefits of Square Cash
Square Cash could work as a bank account alternative. You can receive your paychecks via direct deposit and pay people and businesses using the Cash Card debit card or by inputting their email, $Cashtag, or phone number. The best features of Square Cash include:
- Free to use;
- Money arrives nearly instantly;
- Potentially safer than a bank account—you don’t have to worry about providing bank account information to get paid;
- Send money in just a few quick taps;
- All you need is a phone, email, or $Cashtag to send or receive money;
- Several ways to access the funds;
- Free linked Cash Card Visa debit card available;
- Bitcoin exchange allowed.
Square Cash Drawbacks
Although Square Cash has its pros, some drawbacks may leave you seeking other P2P alternatives. The cons include:
- Businesses pay a 2.75% processing fee on received payments;
- International payments are limited between the U.K. and the U.S.;
- A 1.5% fee for instant cash transfers;
- No interest earned on your balance;
- ATM withdrawals cost $2 if your account doesn’t receive at least $50 in direct deposits per month;
- ATM withdrawals are limited to $310 each or $1,000 per day.
How to Apply for Square Cash
If you’re interested in weighing whether the Square Cash app is a good bank account alternative or you need an easier way to split bills with friends or send and receive cash from loved ones, consider setting up an account and giving it a try. Here’s how to get started with the Square Cash App:
- Download the Cash App;
- Set up an account with your name, email address, or phone number;
- Wait for a verification code and enter it when received;
- Enter your debit card information — it will be used as your payment method when you send cash and to link your bank account for deposits when you receive funds;
- Create a unique $Cashtag you can share with others to get paid.
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