What Is Cash App and How Does It Work?
Written by
Kellan Jansen
Edited by
Emily Gadd
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Cash App is a popular U.S. digital banking and mobile payment app with over 50 million active users. It’s a subsidiary of Block (formerly Square), which is a publicly traded financial services platform led by Twitter co-founder Jack Dorsey.
While the app is not a bank account, it offers banking services and debit cards through its FDIC-insured bank partners. Cash App users can also buy stocks and bitcoin and file their taxes for free with Cash App Taxes.
How Does Cash App Work?
Cash App works much like a paperless checking account. Your account comes with a unique account number and routing number, just as you would have with a traditional checking account. This allows you to do more than transfer and receive money with other Cash App users.
Other Cash App Features
For example, you can also use your Cash App account to:
- Set up direct deposits
- Sign up for the Cash App Cash Card, a Visa debit card, to make purchases or get cash from an ATM
- Buy stocks and bitcoin
- File taxes for free with Cash App Taxes
- Store your savings
To use Cash App, you must download the mobile app and follow the prompts to create an account. Your account will be tied to your username, or what Cash App refers to as a $Cashtag.
How Do You Send Money With Cash App?
To send a payment to another Cash App user:
- Launch the Cash App app.
- Enter the amount to pay on the Cash App home screen.
- Select “Pay” and search for the payee’s $Cashtag, phone number or email address.
- Tap “Pay.”
You can even send money to people who don’t currently have a Cash App account as long as you have their phone number or email address. Once you send the payment, the person will be prompted to create a Cash App account to claim the payment. If they don’t do so within 14 days, you’ll automatically get your money back.
Getting a Refund Through Cash App
However, Cash App won’t cancel or refund a payment that you’ve sent after it’s already been completed. If you send money to the wrong account, your only recourse is to ask the payment recipient for a refund. You can do this by following these steps:
- Tap the Activity tab on the Cash App home screen.
- Select the payment and tapping “Completed.”
- Tap “Report an Issue.”
- Select a reason and tap “next” to complete the refund request.
Request Money on Cash App
You can also request money from other people on Cash App. Here’s how:
- Open Cash App.
- Enter the amount of money you want to request.
- Tap “Request.”
- Enter the person’s Cash App information.
- Tap “Request” again.
The person you request money from will have 14 days to accept or decline your request. If they fail to do either, the request will expire automatically at the end of the 14-day waiting period.
How Fast Can You Receive Money Through Cash App?
When you receive money on Cash App, it becomes available in your balance right away. You can then keep the funds in your account for later use or transfer them to an external bank account.
Do You Need a Bank Account for Cash App?
No, you don’t need a bank account to use Cash App. All you need to get started is a phone number or email address and your zip code. However, if you want a Cash Card you will also have to provide your full name, date of birth, mailing address and the last four digits of your Social Security number.
There are also several ways to add money to your Cash App account without a traditional bank account or debit card. You can deposit paychecks to your account with your Cash App account and routing numbers or deposit paper money into your account through retail partners.
Cash App lets you receive up to $25,000 per direct deposit and up to $50,000 per 24-hour period — regardless of whether that money comes from a bank account or some other means.
How Do You Add Money to Your Cash App Account?
You have a few options for getting money into your Cash App account. If you‘ve linked your bank account to your Cash App account, you can take the following steps to initiate a transfer from your bank account to your Cash App account:
- Open Cash App.
- Select the bank icon.
- Tap the “Add Cash” button from the banking tab.
- Enter a cash amount.
- Tap the “Add” button.
- Enter your PIN or use Touch ID if you have Cash App security enabled.
If you don’t have a linked bank account, you can deposit cash to your Cash App account at several retailers, including Walmart, Dollar General, and Walgreens. The store clerk will need to scan your Cash App bar code to initiate the deposit, and you may be asked to swipe your Cash App Cash Card and show your ID.
Also, note that Cash App charges a flat $1 fee for each cash deposit you make, whether the deposit is $10 or $10,000. If you want to avoid this fee, consider depositing a mobile check via the app or setting up direct deposit instead.
How Much Does It Cost To Use Cash App?
The answers can vary based on how you use the app. For example, there are no fees to send money to other users’ accounts. But there is an instant transfer fee if you want to withdraw money instantly to a linked bank account.
| Type of Transaction | Fee |
|---|---|
| Regular transfer (1-3 days) | Free |
| Instant transfer | 0.5% -1.75% fee, with a 25 cent minimum |
| ATM withdrawals | – $2.50 for out-of-network ATMs, plus any fees the ATM charges
– Free withdrawals at in-network ATMs and one out-of-network fee reimbursement if you get $300 deposits a month |
| Depositing cash | $1 per transaction |
| Depositing Mobile check or direct deposit | Free |
Are There Dollar Limits on Cash App?
Cash App places limits on the amount of money you can send, receive and deposit through different means. These can vary based on whether you’ve verified your account information or not, with verified accounts generally having access to higher limits.
Here’s a closer look:
| Transaction Type | Limits |
|---|---|
| Sending and receiving money | – Send up to $250 per seven-day period – Receive up to $1,000 per 30-day period – Verified accounts may have higher limits |
| Paper money deposits | – $500 in a single deposit – $1,000 per rolling seven days – $4,000 per rolling 30 days |
| Cash Card purchases | – $7,000 per transaction – $7,000 per day – $10,000 per week – $15,000 per month |
| ATM withdrawal | – $1,000 daily – $1,000 per transaction – $1,000 weekly |
Since Cash App dollar limits can vary, you may want to check yours sometimes. You can do so in the app by tapping the profile icon on your Cash App home screen and selecting “Limits.”
Is Cash App Safe?
Cash App is safe to use. It features the same encryption and fraud technologies that monitor millions of daily Square point-of-sale transactions. It’s also PCI Data Security Standard Level 1 compliant, which requires regular on-site audits by third-party qualified security assessors.
Any data you send through Cash App, including payments and debit card information, will be automatically encrypted before being sent to the company’s servers. That’s true regardless of whether you’re using a public or private Wi-Fi connection or your phone’s data.
FDIC Coverage
Also, if you have a Cash Card, you’ll get FDIC coverage up to $250,000 through the company’s partner banks. This doesn’t protect you from fraud, but it keeps you covered in the event of an unexpected banking failure.
Other Safety Precautions
However, you still need to exercise good judgment when using the app to keep your funds safe. For example, you shouldn’t share your login information or PIN with anyone claiming to be Cash App Support, and if something sounds too good to be true, it probably is.
If you’re still concerned about security, you have the option of enabling the app’s Security Lock feature. This will make it so every payment you send on Cash App requires your passcode, Touch ID or Face ID. You can even temporarily disable your Cash Card within the app if you ever think it may be compromised.
Final Take
Cash App lets you perform a variety of financial tasks, including sending and receiving money, making purchases at online and physical stores, and investing. That said, like any financial product, it has some limitations and may be more beneficial as a companion to your regular bank account rather than a replacement.
For example, the lack of a physical branch network can present challenges for larger financial transactions, such as purchasing a new car. You also won’t be able to write any paper checks for your Cash App account balance.
FAQ
- What bank does cash app use?
- Although Cash App isn't a bank itself, it partners with banks to provide services that are similar to traditional checking and savings accounts. The company issues debit cards through Sutton Bank, a regional bank based in Ohio.
- However, Cash App doesn't store customers' balances with Sutton Bank. It relies on Wells Fargo for that service. This means that the FDIC coverage you get from Cash App is through Wells Fargo. As a Cash App user, you won't have any direct interaction with these institutions.
- How does cash app savings work?
- In addition to using Cash App as a payment platform, you can also use your account to save money via Cash App Savings. There are no fees, no minimum balance requirements, and the app lets you pick specific goals you want to save toward. It also gives you the option of automatically rounding up purchases you make through Cash App to the nearest dollar amount and putting the extra toward a savings goal.
- However, unlike traditional savings accounts, Cash App Savings doesn't pay any yield on the balance you hold in your account. This can make a big difference if you're saving a significant of money but won't be as important if you're just starting out.
- Is a cash account the same as a checking account?
- Cash accounts like Cash App are similar to checking accounts in that they give you a debit card you can use online or at physical retailers. You can also deposit checks and paper money to your Cash App account just like a traditional checking account. Plus, your account comes with $250,000 FDIC insurance, just like a checking account.
- One of the main differences between these two types of accounts is that cash accounts are typically offered by online or mobile-only financial services companies. This means you usually won't have a physical branch network attached to your cash account. You also can't write paper checks through your Cash App account.
Andrea Norris and Barri Segal contributed to the reporting for this article.
Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.
