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Cash App vs PayPal: Is Cash App Really Better Than PayPal?

Dec 22, 2022
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Cash App and PayPal are among the most commonly used peer-to-peer (P2P) mobile payment apps in the United States.

Founded way back in 1998, PayPal offers much more financial services than just free domestic transfers. But as we will see below, its fee schedules are often expensive and complex. Cash App is an ideal mobile app to send money instantly to your friends and family for free in the US (and UK).

In this guide, we cover the differences between Cash App and PayPal, why we recommend Cash App for most features, and provide better alternatives for expensive international PayPal services.

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One of the most popular peer-to-peer payment systems in the United States, Cash App is a secure way to transfer money domestically.

With a verified account, you can get a US bank account number, receive unlimited direct deposits, send money to the UK for free, trade stocks and Bitcoin, and file your taxes for free.

Cash App vs PayPal: Is Cash App or PayPal Safer?

We think this section is a tie. Cash App and PayPal are both digital finance platforms regulated as Money Transfer Services in the United States. While neither are licensed banks, they do partner with FDIC-insured partner banks to keep your funds safe. Cash App partners with Sutton Bank and Lincoln Savings Bank while PayPal partners with Wells Fargo. The FDIC will insure accounts up to $250,000 per customer in the unlikely case of insolvency.

Both companies use two-factor authentification and high-end encryption to protect every transaction and to keep your money and data safe. Both used Touch ID and PIN codes to protect your account on the mobile app.

Is Cash App Safe?

Yes, when you verify your Cash App account, you will receive a routing number and checking account number to hold cash balances with their partners. Cash App does survey transactions for potential scams, but in case you are subject to fraud, you will need to call their team directly for support through the app or by calling 1 (800) 969-1940.

With Cash App, you may trade stocks on the stock market. Their brokerage services are provided by Cash App Investing LLC, which is a member of both FINRA and SIPC. You must be aware that investing involves risk and that you may lose money. Investing balances are not covered by FDIC insurance.

Is PayPal Safe?

Yes, PayPal has a buyer and seller protection service in place that tracks fraud. Unauthorized purchases or items may be covered in the event of claims, chargebacks, or reversals. PayPal does not provide users with account numbers or routing numbers. Instead, your email address is used to identify you, and to send money to you.

With both apps, you may purchase cryptocurrency. In both cases, crypto balances will not be covered by FDIC insurance.

📋 License

Money Transfer Service

Money Transfer Service

👥 Customers

70 million

429 million

🔐 FDIC-Insured partner

Try Cash App ❯Learn More

Cash App vs PayPal: Which Has the Better App and Service?

You can download the Cash App and PayPal apps on any iOS device via the App Store, any Android device via Google Play, or a web browser. We will see in this section that PayPal has more international capabilities and is more popular with vendors while Cash App is a good bank account supplement.

Similarities Between Cash App and PayPal

As peer-to-peer payment systems, both offer very similar services for sending and receiving money. Cash App uses user $Cashtags to make transfers while PayPal uses email addresses:

  • Sending and receiving money: You can send money to individuals and pay businesses easily and instantly. Both apps allow you to top up the account by bank transfer, cash, or direct debit.
  • No domestic fees: Both are free to download and neither charge monthly membership fees. If you need to send money immediately to your linked bank, which usually takes a standard 1 to 3 days, then both offer instant transfers for a service fee.
  • Payment methods: Both apps offer debit cards that link to Google Pay and Apple Pay. While more and more vendors are accepting Cash App every day, PayPal has been around for a long time. You'll find that you'll generally be able to use your PayPal balance at more vendors, from sellers on eBay to the local food truck.

What is the Difference Between PayPal and Cash App?

Cash App and PayPal do differ in a few financial service categories, including international transfers, investing, credit, and filing taxes. We walk through these differences in this section:

1. International Payments

Cash App wins this section because it supports free international money transfers between Cash App users in the United States and those in the United Kingdom. Not only do they charge zero fees, but Cash App also uses the real mid-market exchange rate (as opposed to pocketing an exchange rate margin).

PayPal supports international transfers between over 100 countries, but they have among the most expensive fees and worst exchange rates on the market. Use Monito's live comparison engine to find better and more transparent deals.

2. Transfer Limits

PayPal is more appealing here because it does not have major restrictions, allowing up to $60,000 per transaction.

Unverified Cash App users will have restrictions of sending $250 and receiving $1,000 per month. Verified users can send up to $7,500 each week and receive unlimited deposits.

3. Investing

Cash App wins here because PayPal only allows you to purchase and hold cryptocurrency. It does not offer an investment platform.

Cash App's brokerage service, on the other hand, lets you buy publicly-traded stocks without charging commission fees. Bitcoin trading is available on Cash App too. Investing and cryptocurrency both involve the risk of you losing money.

4. Credit Card

PayPal wins here because Cash App does not offer a credit card — only a debit cash card. If you spend with the Cash App card, you can get discounts at popular shops and brands though.

Paypal's MasterCard credit card by Synchrony Bank can earn you unlimited 3% cash back on PayPal purchases and unlimited 2% on all other purchases for no annual fee. PayPal also offers lines of credit. Credit card debt and credit line debt will both be subject to interest fees if not paid back on time.

5. Filing Taxes

Cash App has a slight edge here because it processes personal tax filings and tax refunds for free. Cash App also issues Form 1099-K to businesses that use the app to accept customer payments and Composite Form 1099 to individuals who use Cash App to trade stocks.

PayPal does not offer services for personal tax filing. If you are a business that uses PayPal to get paid for goods and services, then you will be issued a Form 10999-K.

💻 Platforms

Android, iOS, web browser

Android, iOS, web browser

💵 Top-up

Bank transfer, debit & credit card, direct deposit, cash

Bank transfer, direct deposit, cash, check

Int'l transfer

Yes, for US and UK

Worldwide

Cryptocurrency

Bitcoin only

Stock trading

Debit card

Credit card

Contactless

Google Pay

Apple Pay

Files taxes

Try Cash App ❯Learn More

Cash App vs PayPal: Which Has the Cheaper Fees and Exchange Rates?

Cash App and PayPal are free to download, have no account opening fees, and charge no monthly fees. It's completely free to send and receive money domestically from a linked bank account or another user. If you top up by cash at participating stores, then PayPal will charge a $3.95 fee while Cash App will charge $4.00.

Cash App Exchange Rates

Cash App easily wins this section of the comparison. PayPal is well known for its global presence but applies a very high 2.5% to 4.5% margin on its foreign exchange rates. This means that the rate you get is 2.5% to 4.5% weaker than the live rate and PayPal pockets the difference.

Cash App's international money transfer service is limited to use between US and UK Cash App users. Cash App does not charge a fixed service fee and does apply the live exchange rate. If you have friends and family in the UK, then this is one of the best deals you'll find.

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Compare Exchange Rates: Cash App vs PayPal

Use Monito's real-time comparison engine to:

  • Compare Cash App's exchange rates to PayPal's exchange rates;
  • Search for international transfers across hundreds of country corridors.

ATM Withdrawal Fees

Cash App charges $2.00 per ATM withdrawal with its debit card but will waive ATM fees for eligible customers. To become eligible, you must receive $300 or more in direct deposits per month on the app.

PayPal charges $2.50 per ATM withdrawal with its debit card. However, you can get free withdrawals with a PayPal card at MoneyPass ATMs within the US. Find MoneyPass ATMs by using this ATM locator.

  • Cash App: $2.00
  • PayPal: $2.50

Credit Card Transfer Fees

PayPal does not offer top-ups by debit or credit card. Cash App, on the other hand, does allow you to link up your credit card info to your account.

  • Cash App: 3%
  • PayPal: N/A

Cash App International Transaction Fees

While you can use your PayPal balance to spend money with vendors abroad, we highly discourage this. PayPal leverages very high foreign transaction fees when you are making purchases denominated in foreign currency. Cash App's cash card will not work outside of the United States and thus does not leverage foreign transaction fees.

To avoid foreign transaction fees, consider this travel debit card comparison.

  • Cash App: N/A
  • PayPal: 4-5%

Instant Transfer Fees

Standard transfers between your account and a linked bank account will take around one to three days to process. You can opt to send an instant transfer, but both will charge a convenience fee for the service.

  • Cash App: 0.5% to 1.75%
  • PayPal: 1.75%

Business Transaction Fees

This section only applies to business profiles. If you are a business that uses Cash App or PayPal to accept payments from customers in exchange for goods and products, then you will have to pay for the service. Both financial platforms charge a fee to process those business transactions, although PayPal is more expensive. In contrast, Stripe takes 2.7% + $0.05 per sale.

  • Cash App: 2.5% per transaction (2.75% when accepting credit cards)
  • PayPal: 2.99% + $0.49 (3.49% + $0.49 when using PayPal Checkout)

Account opening

$0.00

$0.00

Monthly fee

$0.00

$0.00

ATM withdrawal

$2.00

$2.50

Transfer by bank

$0.00

$0.00

Top-up by credit card

3.00%

N/A

Instant transfers

0.5% to 1.75%

1.75%

Business transactions

2.5%

2.99% + $0.49

Try Cash App ❯Learn More

Cash App vs PayPal: Which Do Customers Review Better?

With tens of millions of customers each and millions of reviews, Cash App and PayPal are the two most popular and highly-trusted P2P networks in the United States. PayPal has the edge here because its early founding and global reach have given it nearly 430 million customers.

Cash App scored 4.7 out of 5 stars on Google Play over PayPal's score of 4.3. The two services tied on the App Store, with 4.8 out of 5 stars.

In the end, we think it's safe to say that both services, by and large, impress their customers.

🌎 Availability

the US & the UK

Worldwide

📞 Support

In-app live chat, phone, and social media

In-app live chat, phone, social media, and email

Google Play score

4.7

4.3

Goole Play # reviews

1,970,000

2,815,564

App Store score

4.8

4.8

App Store # reviews

3,400,000

6,129,766

Customers

70 million

429 million

Try Cash App ❯Learn More

Cash App vs PayPal: The Bottom Line

If you intend to use these apps primarily to receive money or pay friends and family, then you can't go wrong with either option. Your decision may simply come down to which app is more widely used in your circle of acquaintances. Our one strong recommendation here is to consider PayPal alternatives when making international money transfers.

For additional features, like a credit card with no annual fee and access to more kinds of cryptocurrency, PayPal will be the better choice. To buy stocks, send money to the United Kingdom for free, or accept business transactions, Cash App will be a better choice. Cash App's free tax filing feature may also make it the more appealing app.

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Cash App Features:

  • Get US account details for direct deposits, tax returns, and tax refunds;
  • Transfer $7,500 per week and receive unlimited;
  • Send money to UK users with no hidden fees;
  • Deposit checks and cash.

Frequently Asked Questions About Cash App vs PayPal

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References Used In This Guide

Square. Terms and Conditions. Accessed 13 December 2022.
Square. Licenses. Accessed 13 December 2022.
Cash App. Help Center. Accessed 13 December 2022.
PayPal. Merchant Fees. Accessed 13 December 2022.
PayPal. Credit Services. Accessed 13 December 2022.

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