Tearsheet/Paige Stern: WTF is Square Cash?

Tearsheet

WTF
WTF is Square Cash?

 •   Square Cash opens Square up to both consumers and businesses.
•    Square is creating an ecosystem with their complementary products.

Paige Stern | June 28, 2019

WTF is Square Cash?

So, what is Square Cash?

Square Cash is an app, similar to Venmo, that helps individuals and businesses send and receive digital payments. It’s also outpacing Venmo in terms of new downloads.

To pay people or merchants, users can load their Cash accounts with a debit or credit card. To send money to someone who has Cash, you use a username handle, known as a $cashtag. However, you only need the cash app to receive money through Cash but not to send it.

Users can transfer their Square Cash balance to their bank accounts, as well.

Okay, so why would businesses use it?

For businesses, it seems to be all about providing convenience for consumers. With the Cash App, the customer can avoid pulling out her wallet, and can complete the transaction all on their phone. With Cash, the customer does not even have to be standing in the store.

Users generally feel that receiving payments through Square Cash is much quicker than using a bank or credit card. Square secures the private payment information of its users through ID verification and encrypting payment data.

Businesses can receive or send direct payments instantly through the app, compared to the minutes, hours or days that it takes some credit cards and other forms of payment.

Businesses also appreciate keeping their earnings all in one place — within the Square ecosystem. As Square rolls out more merchant services, businesses have the option of distributing payroll, sending money back into their personal accounts, or using a Square MasterCard debit card to spend accrued cash. In a way, Square Cash almost serves as its own bank account.

What’s in it for consumers to use it?

Well for one thing, some digital banking apps are popular because of the convenience they provide customers.

Additionally, a cash card that is linked directly to a consumer’s Square Cash account creates a system similar to a bank account — and Square knows this. The payments company has developed a loyalty program called Boost that offers consumers discounts and special deals at their favorite businesses, which comes with using their debit card.

Consumers also appreciate Square’s hook up with Bitcoin. It’s pretty difficult for most people to buy Bitcoin. Square Cash has made it considerably easier for users to buy and sell Bitcoin through their Cash accounts.

So, is it like Venmo?

The two apps are similar, for the most part. The main difference between Venmo and Square Cash is that Venmo is used predominantly by consumers, while Square Cash, because of Square’s roots with merchants, is used by both individuals and businesses.

Yes, Venmo is also a mobile payment service and has been trying to increase its penetration with merchants, but it is also considered a social media app, as users can post about why they are sending money to their friends, or even like and comment on their friends’ payments.

And though Venmo has already managed to establish relationships with several large companies, like Uber, consumers have a limited number of options of businesses that accept Venmo. Venmo does advertises that anywhere users see they can pay online or on their phone with PayPal people can also use Venmo.

In the last year, both Venmo and Square Cash have launched cash cards that are directly linked to users’ account balances. For Venmo this is particularly important, as users can spend their Venmo balance at merchants who don’t accept Venmo this way.

Why is Square pushing Cash so hard?

It has become clear that Square is building an ecosystem. By creating products that complement one another — from its first product the Square Reader to Square Payroll, Online Store, Cash App and now a Square Mastercard debit card, the company is looking to maximize money movement within its own ecosystem.

Square is also currently in the process of reapplying for a bank license. Though the company already lends lending to small businesses, the company is expanding into more core banking offerings. Overall, you could say Square is turning into a challenger bank.


WTF
WTF is chargeback protection?

    Chargebacks are a major drain on merchants.
    A variety of new technologies provide merchants with chargeback protection.

Michael Deleon | June 14, 2019
WTF
WTF is banksplaining?

    Chase famously tweeted out a message that some felt shamed the poor.
    Banks should stop banksplaining and lead the way to better financial health through products and experiences.

Zoe Murphy | May 10, 2019
WTF
WTF is decentralized credit scoring?

    The traditional credit score leaves a lot of people out of the financial system.
    Decentralized credit scoring can provide broader and more fair coverage.

Dan Pelberg | March 14, 2019
WTF
WTF is data aggregation?

    Data aggregation is the underpinning of digital finance.
    Here's what it is, how it works, and why it's important.

Meir Leff | February 11, 2019
WTF
WTF is multichannel onboarding?

    Landing a new customer is just part of the work for financial services.
    Next, the challenge is to get the customer activated.

Zack Miller | December 11, 2018
More Articles
About Tearsheet

Tearsheet is the only media company obsessively focused on technology’s impact on the financial services and fintech industry. Read by decision makers across product, marketing, and digital, Tearsheet connects with its audience across web, email, podcasts, the Outlier membership program and in-person events.
Subscribe to our newsletter
Receive information about Tearsheet programs and events
Follow us
@tearsheet

Join the conversation by following us on Linkedin and other social media.

© 2019 Tearsheet. All rights reserved.

    About Us Masthead Privacy Policy

Subscribe to our weekly newsletter