The evolution of technology has made financial transactions a breeze, transforming our smartphones into financial hubs. Among the leading mobile payment apps are Cash App and Venmo.
Each platform has distinct features, leaving many potential users wondering which is better. This comprehensive review will analyze the key components of both services, helping you make an informed decision.
History and Overview of Cash App and Venmo
Cash App came into existence in 2013, an innovative solution provided by Square Inc. Its intuitive design, combined with extensive functionalities, has attracted millions of cash app users.
On the other hand, Venmo, a product of PayPal, was launched in 2009 and has since then grown exponentially. With a unique social element, it has appealed to a significant number of digital-savvy users.
Setting Up and Using the Platforms
Setting up a Cash App account or a Venmo account requires just a few steps. Both platforms require linking a bank account or a credit card to facilitate transactions. The setup processes are user-friendly, requiring minimal technical skills.
Cash App and Venmo both provide a seamless user interface on various platforms – iOS, Android, and web browsers. Venmo users often laud the app’s social feed that documents their transaction history, a feature absent in Cash App.
Sending and Receiving Money
In the modern age of digitization, moving money between accounts or between individuals should be a straightforward and efficient process. Both Cash App and Venmo place this feature at the heart of their service, allowing users to send and receive money with ease. Let’s look at the specifics of how this process unfolds on each platform.
Cash App: Instantaneous Money Movement
One of Cash App’s core functionalities is the ability to send and receive money instantly. After setting up an account and linking a bank account, users can send money by tapping the ‘$’ icon at the bottom of the main screen. The app then prompts users to input an amount and choose a recipient from their contact list, or by manually entering the recipient’s phone number, email, or $Cashtag, a unique username for Cash App users.
Receiving money on Cash App is just as straightforward. When another user sends you money, it lands in your Cash App account, reflected in your app balance. You can keep the funds in the app for future payments or withdraw it to your linked bank account.
One notable feature of Cash App is the ability to send and receive Bitcoin, an offering not currently available on Venmo. For users interested in cryptocurrencies, this could be a determining factor in their choice of app.
Cash App has some limitations regarding how much money users can send or receive. Users can send up to $7,500 per week and receive an unlimited amount once their account is verified. Unverified accounts have a $1,000 monthly receiving limit.
Venmo: A Social Approach to Transactions
Venmo takes a slightly different approach, integrating social elements into the process of sending and receiving money. To send money, users tap the ‘Pay or Request’ button at the bottom of the screen, select a contact (or multiple contacts for group payments), enter an amount, and add a note describing the payment. These notes, often including emojis or funny descriptions, are a part of Venmo’s unique charm.
Receiving money on Venmo is as straightforward as Cash App. The money received lands in your Venmo balance and can be kept there for future Venmo transactions or transferred to a linked bank account. It’s worth noting that money received does not automatically transfer to your bank account, providing users the flexibility to manage their Venmo balance independently.
As for limitations, Venmo users can send up to $4,999.99 per week for person-to-person transactions, once identity verification is completed. For unverified accounts, the limit is at $299.99 per week. There’s no limit to how much money users can receive on Venmo.
Unique Features and Services
Beyond just enabling peer-to-peer money transactions, both Cash App and Venmo have developed unique features and services that add value to their user experience and set them apart in the competitive digital payments industry. Let’s take a closer look at what each platform offers.
Cash App: Bitcoin and Stocks
Cash App differentiates itself from Venmo and other competitors with its Bitcoin trading feature. Users can directly buy and sell Bitcoin from their Cash App balance. This introduction of cryptocurrency to the platform has made Cash App a more versatile financial tool, allowing users to participate in the ever-growing crypto market conveniently.
Furthermore, Cash App also offers a stock trading feature. With as little as $1, users can invest in stocks, opening the world of stock trading to a broader audience. Whether you’re a seasoned investor or a newbie just starting, Cash App’s investing feature offers an accessible way to diversify your financial portfolio. Please note that the brokerage services are provided by Cash App Investing LLC, a subsidiary of Square, Inc.
Moreover, the Cash Boost feature is another unique offering. Users with the Cash Card can activate boosts in the app to save money on purchases at certain vendors. Boosts offer instant discounts and are easy to use, making them a favorite among Cash App users.
Venmo: Social Payments and Business Profiles
Venmo’s standout feature is the integration of social elements into its platform. Each payment or request comes with a note that shows up in a feed, much like a social media timeline. It’s a unique approach that adds a fun, social aspect to financial transactions. Users can even like and comment on their friends’ transactions, making Venmo a more interactive experience compared to other payment apps.
In addition to its social component, Venmo also offers business profiles. Small businesses and sellers can set up a professional profile on Venmo, separate from their personal profile. This feature allows businesses to accept payments from customers on Venmo, making transactions convenient for both parties. It also offers sellers exposure to Venmo’s vast user base, providing them an opportunity to expand their business reach.
Venmo has also ventured into the credit card market. The Venmo Credit Card, issued by Synchrony Bank, allows users to earn custom cash back on their spending, directly into their Venmo account. This move into the credit card market offers Venmo users a more comprehensive financial experience, all within one app.
Fees and Limits
One crucial aspect to consider while choosing between Cash App and Venmo is the costs associated with their services. Each platform has its unique fee structures and limits which may impact users differently, depending on their needs and usage.
Cash App: Fees and Transaction Limits
Cash App allows users to send and receive money for free. However, for instant transfers to a linked bank account, there’s a 1.5% fee. Standard transfers, which can take up to three business days, are free. If you are sending money via a credit card, a 3% fee is charged.
There’s no fee to use Cash App’s Bitcoin and stock trading services. However, the app does have a spread between buy and sell prices for Bitcoin, which effectively acts as a fee.
Cash App allows users to send up to $7,500 per week, and there’s no limit on the amount you can receive. The platform also has withdrawal limits: $250 per transaction, $1,000 in any 24-hour period, $1,000 in any seven-day period, and $1,250 in any 30-day period.
As for the Cash Card, ATM withdrawals are free if the user makes at least $300 in direct deposits to their Cash App account in the last 31 days. Otherwise, the fee is $2.50, in addition to any ATM operator fees.
Venmo: Transaction Charges and Limits
Venmo doesn’t charge for basic services like sending money from a linked bank account, debit card, or your Venmo balance. However, there’s a 3% fee on credit card payments and some business payments.
Venmo charges a 1.75% fee (minimum $0.25, maximum $10) for instant transfers of your Venmo balance to your bank account, while standard bank transfers are free. If you are using the Venmo Debit Card, withdrawals are free at MoneyPass ATMs, but there’s a $2.50 fee at non-MoneyPass ATMs in addition to any fees charged by the ATM operator.
In terms of limits, Venmo allows payments of up to $4,999.99 per week on a fully verified account. For new accounts or those without identity verification, the limit is $299.99 per week. Venmo has a rolling weekly limit of $6,999.99 for person-to-person payments, purchases with the Venmo Debit Card, and merchant payments combined.
Security Measures and User Protection
Security and user protection are critical considerations when choosing between financial apps. Both Cash App and Venmo prioritize user security and employ numerous measures to safeguard user data and transactions.
Cash App: Secure Transactions and Data Protection
Cash App employs a number of robust security protocols to ensure safe transactions. It requires a unique code or biometric identification (Face ID or Touch ID) for sign-in and Bitcoin withdrawals.
The app uses encryption to safeguard personal data and provides assistance through its support team for any suspected fraudulent activity. However, it’s important to note that Cash App does not offer protection for willingly sent payments to other users.
Venmo: Advanced Encryption and Verification
Venmo also offers comprehensive security measures to protect user transactions and personal information. It employs encryption for protecting data, and users are required to verify their identity when accessing the app from a new device.
Venmo also allows users to set up a PIN code for additional protection. While Venmo uses strong security measures, users are encouraged to only transact with people they know and trust.
When it comes to customer support, both platforms offer several ways to access help. You can reach out to Cash App or Venmo via email, in-app messaging, or through their websites. The efficiency of customer support is crucial, especially if a user suspects fraudulent activity or faces issues with transactions.
The best use case for Cash App is for those who have varied financial goals and are interested in the ability to invest in Bitcoin and stocks directly from their app. It’s also an ideal choice for those who appreciate discounts through the Cash Card ‘Boosts’ feature.
On the other hand, Venmo excels in its social components. It’s best for those who regularly split bills with friends or family and enjoy the social feed documenting these transactions.
Cash App vs. Venmo: Which one is right for you?
Cash App and Venmo each have strengths and weaknesses, and the choice between the two largely depends on personal preferences and needs.
If you value straightforward money transfers and the additional ability to invest, Cash App may be the better choice for you. However, if the social element of financial transactions appeals to you, along with the easy splitting of bills, Venmo could be your preferred app.
Frequently Asked Questions
Can I use Cash App or Venmo internationally?
Cash App only works for users in the United States and the United Kingdom. You cannot make international payments. Venmo is also available only to users in the United States, and you can’t send money internationally with Venmo.
What happens if I send money to the wrong person?
If you accidentally send money to the wrong person on either platform, your best course of action is to send a request to that person asking them to send the money back. Cash App and Venmo do not offer protection for transactions if you willingly send money to someone.
Can I use these apps without linking a bank account?
Yes, both Cash App and Venmo can be used without linking a bank account. However, you’ll need to link a debit card or a credit card to make transactions.
How long do transfers take with Cash App and Venmo?
Both Cash App and Venmo offer instant transfers to linked bank accounts for a small fee. For free transfers, Venmo can take up to 1-3 business days, while Cash App’s standard deposits are usually available within 1-3 business days as well.
How do I contact customer support?
For Cash App, you can contact customer support through the app itself, or by visiting the Cash App Support website. Similarly, Venmo’s customer service can be reached through the app, or by visiting the Venmo Support website.
Do these apps report to the IRS?
For both apps, if you receive over $20,000 and make more than 200 sales transactions that involve goods or services in a single calendar year, you will receive a Form 1099-K and this information will be reported to the IRS. For personal transactions, these are not typically reported.