Cash App vs PayPal: Which App is Better for Payments?

Today you don’t need cash to pay someone back. All you need is your phone and an app, such as Cash App or PayPal. With the touch of a button, you can send or receive funds, pay for goods and services, and even invest your money.

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What is Cash App?

Cash App is a payment app owned and managed by Square, the company known for retail point-of-sale systems. You can send friends and family money by using their phone number or email. Cash App provides you with a debit card to spend your balance. You can also transfer the money to your bank account or even invest it. If you need more information regarding Cash App it’s best that you read our Cash App Review to learn about the Cash App fees, Cash App pros and cons, and many more.

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How Does Cash App Work?

It doesn’t get much easier to send or receive money using the Cash App. All you need is the app downloaded to your phone or tablet and a linked bank account. You can then send and receive cash using one of three things:

  • Cell phone number

  • Email address

  • $Cashtag (your user ID with Cash App)

You can leave the money in your Cash App balance, transfer it to a bank account, or buy stocks in specific companies.

Cash App Features

  • Includes a free debit card called the ‘Cash Card.’ You can use the Cash Card anywhere you’d normally use a debit card to pay for goods and services. You can also earn ‘Cash Boosts’ or instant savings where you’ll spend money, but you must use your Cash Card to redeem the savings.

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  • Receive all direct deposits up to 2 days early. Cash App provides early access to your direct deposit paycheck, tax refund, or any other direct deposit you receive in the Cash App.

  • You can invest in stocks or Bitcoin. With as little as $1 in your Cash App account, you can invest in companies or convert your dollars to cryptocurrency.

Cash App Referrals

The Cash App pays you to refer others to Cash App. All you have to do is share your Cash App referral code with friends and family. Every time someone uses your code to sign up and they send their first $5 (or more) using the app, you’ll receive up to a $15 referral bonus. Click this link to learn more about Cash App referrals.

What is PayPal?

PayPal has been around a lot longer than Cash App, but it’s changed quite a bit in recent years. While it used to be the only way to send and receive electronic payments, PayPal does so much more.

Most recently, PayPal has jumped into the peer-to-peer payment service, enabling users to send and receive money from friends and family. All you need is a user’s email tied to their PayPal account and you can send or request money.

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How Does Paypal Work?

PayPal’s mobile app is easy to use. You just enter the user’s email address and the payment amount and PayPal does the rest. If someone owes you money, you can send them your PayPal.Me link. This gives users a direct link to send their money to, which takes only seconds especially if they already have a PayPal account.

PayPal works much like Cash App when you set it up. You must sign up for an account and link your bank account (or debit/credit card).

PayPal Features

  • User-friendly app with face ID. In today’s technological times, security is important. PayPal’s mobile app requires a face ID sign-in which limits the risk of hackers getting into your account even if they get a hold of your phone.

  • Granting access to your contacts makes paying friends and family easy. Rather than worrying about mistyping an email address, let PayPal find your friends’ PayPal accounts automatically by granting access to your contacts on your phone.

  • You can set up ‘pools of money.’ This works great when you’re buying a group gift or putting money together for a group outing. You set up the pool with a name, end date, and amount. Contributors add funds to the pool and then you use the funds for the intended purpose.

Cash App vs PayPal: Security

Security should be your top concern for any payment or banking service. Cash App and PayPal both take security seriously, protecting your information and money.

Cash App – Users can set up two-factor authentication and facial recognition to reduce the risk of fraudulent activity. You can also set up push notifications so you know about all activity right away and you can freeze your Cash Card if it’s lost or stolen.

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PayPal – PayPal has a history of solid security. They haven’t been a part of the large data breaches and you can set up two-factor authentication to protect your PayPal account even further. PayPal also has a purchase protection program that ensures you receive your goods or services before PayPal charges your bank account or credit card.

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Winner: Both platforms take security seriously, but PayPal takes it a step further by protecting your purchases.

Cash App  vs PayPal: Transfers (Send and Receive)

Sending and receiving money is the point of apps like Cash App and PayPal and both do a great job of making it easy for users.

Cash App – It takes just seconds to send or receive money using the Cash App. You can send money from your Cash App balance or your linked bank account. You can pay friends and family, tip service providers, and pay merchants if they have a Cash App QR code. Both users must have a Cash App account to send and receive payments.

PayPal – All users must have a PayPal account to send and receive funds. The payment process is simple. You can search your contacts or enter an email address manually. Once you enter the amount, you hit send and the funds are sent. When you receive funds, you can keep them in your PayPal account or transfer them to your bank account.

Winner: This one is a tie. Cash App and PayPal are both easy to use to send and receive funds.

Cash App vs PayPal: Fees

Payment apps, like Cash App and PayPal have to charge fees to stay in business, but not all tasks incur a fee.

Cash App – You can send and receive money free of charge. If you use your Cash App ATM card, though, you’ll pay $2 for each ATM transaction until you have $300 in direct deposits. Then you’ll get 3 free ATM transactions per month. Cash App also charges for ‘Instant Transfers’ versus standard transfers which take 1 – 3 business days. If you fund payments with a credit card, you’ll pay a 1.5% fee. Cash App charges a 3% fee for any transfers made with a credit card.

PayPal – You can send and receive money free of charge if you use your PayPal funds or a linked bank account. Using a credit card to send a payment costs 2.9%, though. Just like Cash App, if you transfer funds on a ‘standard schedule’ it’s free. If you want instant access, PayPal charges a 1% fee with a $10 maximum.

Winner: PayPal has lower fees all around, even if you use a credit card or want instant access to your funds.

Cash App vs PayPal: Debit Cards

Both Cash App and PayPal offer debit cards to make it easier to use your balance.

Cash App – The Cash Card is a debit card you can use anywhere you’d normally use debit cards. You can opt into Cash Boosts to save money and customize your card to your liking.

PayPal Cash Card – Use your PayPal Cash Card anywhere Mastercard is accepted. You can use it to pay for goods and services or at one of the 33,000 MoneyPass ATMs to get access to your cash (for free).

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Winner: PayPal Cash Card is a little better because it’s a part of the MoneyPass ATM network, which gives you access to your cash for free.

Cash App vs PayPal: Spending and Receiving Limits

Most payment apps have spending and receiving limits to protect your financial information and money.

Cash App – If you have an unverified account (name, birth date, and Social Security number), you can send up to $250 a week and receive $1,000 a month. Once you verify your information, Cash App increases your limits.

PayPal – If you have an unverified account, PayPal may impose limits on how much you can send and receive. If you verified your account, most people can send up to $60,000 at a time, although some senders may be limited to $10,000. There is no limit on how much you can receive unless PayPal thinks something is amiss.

Winner: PayPal has much looser limits for both sending and receiving.

Cash App vs PayPal: Customer Service

Both Cash App and PayPal offer online customer support via their preloaded topics and questions.

Cash App – You can call 855-351-2274 to talk to an automated system to get answers to your questions.

PayPal – You can send an instant message or visit their resolution center after logging into your account to get further assistance.

Winner: Both Cash App and PayPal have similar customer service options and neither give the option to talk to a live person.

Cash App vs PayPal: Which is Better?

Which app is right for you depends on your needs. You can only send money to users of either platform, so that limits your options. For example, if you have Cash App but your friend has PayPal, you can’t send money to one another.

It also depends on what you want to do with it. PayPal is great for those who want to use the app to pay for goods or services as most stores accept it today. Cash App is good for those who want to invest their money or take advantage of the Cash Boosts.

Also curious how Venmo differs from Cash App? Check out Cash App vs Venmo to help you find out.