Cash App Review 2020: Is it a Safe Way to Send and Receive Money?

Here’s how Cash App works and what you should know before using it.
Last updated Oct 1, 2020 | By Taylor Medine
Happy woman using smartphone

FinanceBuzz is reader-supported. We may receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

If you’ve ever been out with a large group, chances are you’ve had someone ask to send you their share of the tab via Cash App. The app is free and simplifies the process of transferring money or paying a friend with a credit card. With just a few hits of a button, you can send and receive money, so there’s no more awkwardly asking, “Can we pay with multiple cards?” at the end of dinner.

Cash App gets high praise from users who give it a 4.5-star rating in the Apple App Store. If you’re thinking about downloading it, this Cash App review will cover how it works, who it’s for, and whether it’s safe to use.

In this Cash App review:

What is Cash App?

Cash App is a peer-to-peer payment app created by Square, Inc. in 2013. The app is available for iOS and Android and is widely popular. In June alone, more than 30 million people used the Cash App for transactions, and it’s ranked No. 1 in the App Store finance category.

Cash App is just one of many products that Square offers to help people with money transactions. Headquartered in San Francisco, California, Square launched in 2009 and provides payroll tools, payment hardware, and more for restaurants and other small businesses.

How does Cash App work?

Cash App has four main functionalities: sending money, receiving money, mobile banking, and investing. Here’s how each one works:

Sending money

All you need is the recipient’s email address, phone number, or $Cashtag to send cash. The $Cashtag is a username that each person sets up within the app profile.

After entering the person’s information, the app will ask where you want to withdraw money from to make the payment. The money can come from your Cash App balance, connected bank account, or credit card. Cash App accepts Visa, MasterCard, American Express, and Discover.

Sending payments from your Cash App balance or bank account is free. If you use a credit card to send a payment, there’s a 3% transaction fee.

You can send up to $1,000 within a 30-day period, but that limit will increase if you verify your name, date of birth, and last four digits of your Social Security number.

Receiving money

When you receive money, it goes into your Cash App account first, and then you can withdraw to a connected bank account or debit card.

A standard deposit shows up in your bank account within one to three business days, whereas an instant deposit to your debit card happens instantly but has a 1.5% rush fee.

Instead of transferring money out to a bank account, you can also request a Cash Card to use Cash App funds to purchase items online or in retail stores. There’s a $2 fee if you use the Cash Card at an ATM, plus the ATM servicer may charge a fee as well.

Banking

Besides receiving payments from friends, you can deposit other funds — such as your paycheck direct deposit and tax refund check — using Cash App banking.

You must order a Cash App card to unlock the banking feature. According to the website, setting up direct deposits into your Cash App account could help you get your paycheck up to two days faster than direct deposit to another bank.

Cash App doesn’t come with Federal Deposit Insurance Corp. coverage though. FDIC insurance guarantees up to $250,000 of your cash if a financial institution goes belly up. A Cash App representative says that the team “is actively working to address this coverage.” So although there are banking features, it’s not an account where your money has federal backing.

Cash App Investing

Cash App Investing lets you invest in stocks and exchange-traded funds with as little as $1 with no commission fees. This feature is available only to U.S. residents who are 18 years or older. To sign up, you need to tell Cash App your full name, date of birth, Social Security number, address, and employment information. If you’re new to investing, FinanceBuzz’s beginner-friendly guide discusses how to invest money.

Who is Cash App best for?

Cash App is one of the best money apps for person-to-person transactions between friends and other people you trust. There’s no need to remind your roommate to pay their share of the rent or utilities each month. Instead, you can just send them a Cash App payment request.

There is, however, a location limitation. Cash App is primarily for U.S. to U.S. transactions, but you can also send money to people in the U.K. Money transferred across the pond is converted from USD to GBP. If you’re living abroad or trying to send money to someone in another country, you could consider PayPal or TransferWise instead.

Before using the Cash App to handle your banking, shop around to see what checking accounts or high-yield savings accounts are available at credit unions or online banks. The Cash App has direct-deposit functionality, but the banking features are limited, and your money is not FDIC-insured. The account doesn’t earn interest, you can’t deposit or write checks, and there’s a $2 ATM fee. The best banks have no ATM fees and expanded banking features, such as mobile check deposit.

For business, the personal Cash App account may not be ideal for many transactions. It’s free to use, but you can only receive up to $1,000 in a 30-day period until you go through the steps of verifying your account. Plus, tracking dozens of Cash App payments could be an accounting and logistical nightmare. Cash App has a Cash for Business version that you can upgrade to, but there is a 2.75% transaction fee for each payment you receive.

Is it safe to send money with Cash App?

Payment information is encrypted and sent through secure servers, according to the Cash App website. You should take some additional steps to ensure no one can send money using your phone without your permission. Cash App recommends password-protecting your phone and enabling the in-app security lock, which will require a passcode for each payment and deposit transaction.

Also, keep in mind that you probably won’t be able to cancel payments you send to another person’s Cash App. Because of this, you should be extra careful when sending money to people you don’t know, especially if you’re trying to buy something. A popular scam is for sellers to say they accept only Cash App payments and then ghost you before sending the product.

If someone calls or texts you from Cash App customer service, that could be a scam too. The Better Business Bureau recently warned that people posing as Cash App customer service reps have been asking users to set up a new Cash App account to troubleshoot a problem only to run off with their Cash App balance.

How to sign up for Cash App

  1. Download the app. Head to the Apple or Google Play store to download the app for free.
  2. Enter your phone number. Cash App will ask for your phone number to send a confirmation code. Enter the code you receive to start the account.
  3. Choose your $Cashtag. Add a photo, $Cashtag, and email to complete your profile.
  4. Link financial accounts. Add a bank account or credit card account to send payments.
  5. Send and receive money. Get the $Cashtag, email, or phone number from your friends to send them money, or send payment requests to receive cash.

FAQs about Cash App

Is Cash App legit?

Yes, Cash App is a legit app that was created under the Square, Inc. brand. Although the app is legitimate, you should use it cautiously. Scammers have found ways to defraud people using the app, so only send and accept money from people you trust.

Protect your money by creating a password for your phone. Cash App recommends always double-checking the recipient’s $CashTag, email, and phone number before sending money to avoid accidentally sending it to the wrong person.

How much money can you send through Cash App?

You can send up to $1,000 within a 30-day period, so you could have to do a bit of budgeting to stay under that limit. You can increase this limit if you provide information about yourself, such as your name, date of birth, and last four digits of your Social Security number.

Does Cash App charge a fee to send money?

Cash App charges a 3% fee if you send money from a credit card. However, there’s no fee to send money from your Cash App balance or bank account, even if you send money to someone in the U.K. As we mentioned above, you can send money across the pond with Cash App, though it’s mainly a U.S. payment service, so it isn’t a solution if you’re trying to send money to friends and family across the world.

How do you withdraw money from Cash App?

To withdraw funds from Cash App, click on your Cash App balance and then hit the “Cash Out” button. You tell Cash App how much you want to withdraw from your balance and how soon you want to receive the funds.

The standard transfer deposits into your account within one to three business days, and it’s free. The instant transfer has a 1.5% fee. For instance, if you wanted to deposit $500 into your bank account instantly, it would cost you $7.50.

Do you need a bank account for Cash App?

You don’t need a bank account to use Cash App. Instead of sending money you receive to a connected bank account, you can use the Cash Card to make online and in-store purchases.

A bank account is not necessary to send money either. You can send money from your Cash App balance, or you can use a credit card. However, credit card payments do have a 3% transaction fee.

The bottom line on Cash App

No one likes being the person splitting up the check after everyone throws in a credit card. Cash App has made it easier to navigate this situation — pay with your credit cards, collect the points, and have everyone else send you money through Cash App. Cash App also offers a banking product and investing product that allows you to invest in stocks online for free.

The app does have some limitations, though. You can’t send or receive more than $1,000 in a 30-day period until you verify your account. Say your best friend is trying to send you their share of the hotel stay and airfare after a vacation. You might have to wait until their account is verified before you can get the money.

Also, make sure that you’re careful when sending cash. If you accidentally send money to the wrong person, there’s no guarantee you’ll get it back. Check and re-check the $CashTag, phone number, and email address before you send money.