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Cash App vs. Venmo – Which is For You?
In recent years, the popularity of electronic payments using digital wallet services has skyrocketed. Two of the top digital wallets available are Cash App and Venmo, both of which have their particular advantages and disadvantages.
In this article, we’ll compare Cash App and Venmo to see which of these apps are better suited for your needs.
What’s Cash App?
Cash App is a peer-to-peer program that allows users to transfer and receive money digitally. Although many other services already do this, Cash App offers several features that aren’t available to most other digital wallets. Two of the most notable are the ability to invest in Bitcoin directly from Cash App and its tax payment feature.
You can also set up direct deposits that fund Cash App through your paychecks or tax refunds. This will require you to verify your identity by providing your real name, birthday, and social security number. Submitting this information also allows you to increase your spending and transfer limits, starting at $250 per week or $1,000 per month, to $10,000 per month once fully verified.
Cash App also offers users a debit card, making it easier to pay for physical transactions using your Cash App account rather than a bank one. There are no minimum balance requirements and no fees for fund transfers between Cash App accounts. It does however charge a 3% fee for transactions funded via credit card.
Eliminating the tedium of having to physically file your returns, Cash App also can accept tax refunds and deposit them directly to your Cash App balance.
Funds kept via Cash App are generally secure since it uses the same technology most major credit card companies utilize. It is, however, important to note that your balance is not FDIC insured, unlike with major banking companies. As such, should your funds go missing, there’s currently no method to recover them.
Additionally, while it does offer a direct way to trade Bitcoin, the app has limited analytic and research features. It might be a good way to start investing in crypto, but serious traders will find the app a bit lacking.
Pros
- Money transfers are free
- Direct Bitcoin investment
- Visa Debit card availability
- Ability to pay taxes and accept tax refunds
Cons
- Funds aren’t FDIC insured
- Limited trading options
What’s Venmo?
Similar to Cash App, Venmo is a peer-to-peer payment system with social networking functions that allows users to receive and send funds electronically. Venmo also offers a debit card that is accepted by any store that allows Mastercard payments. As a convenient method for purchasing cryptocurrency, Venmo also has dedicated a tab for this feature.
Venmo accounts can be funded in a lot of different ways, such as bank transfers, direct deposits, and checks. These functions do require you to have a Venmo debit card, though. The application process is free, and you’ll need to provide Venmo with proof of your identity. Once your ID has been verified, the card will arrive in a few weeks.
ID verification isn’t required to use the base features of the app, however, and unverified accounts can still receive funds from other Venmo accounts. While paying with an unverified account, you’ll be limited to $299.99 per week. In contrast, verified accounts have limits ranging between $4,999.99 and $6,999.99 per week.
A useful feature of a verified account is the ability to fund it using checks. Depending on your chosen timeframe, your funds can take up to 10 days to appear in your account. There is also an option for expedited delivery within minutes, with the caveat of higher transfer fees.
Like Cash App, credit card fund transfers via Venmo are charged with a 3% fee, though any other kind of fund transfer is free. Check deposit fees range from 1% to 5%. As with Cash App, Venmo funds aren’t FDIC insured, but the company is owned by PayPal, and is subject to the same stringent security measures.
What distinguishes Venmo from other digital wallets is its social networking aspect. Payments made and sent via Venmo can be shown as text messages on its social tab, though amounts aren’t shown. This aspect has been criticized by some as counter-intuitive to the private nature of monetary transactions. In response, Venmo has added a way to keep transactions private, though this feature must be turned on manually by users.
Despite these downsides, Venmo remains a very popular app and is a handy way of quickly transferring money between friends and family.
Pros
- Free fund transfers between Venmo accounts
- Mastercard debit card
- Accepts check deposits
- A Social aspect to transactions
Cons
- Funds aren’t FDIC insured
- Transactions are potentially viewable by the public
How Do They Compare?
There are many similarities between Cash App and Venmo. For those that want to directly compare both, here are their related features:
Fees
Cash App charges no fees for sending and receiving payments, though it does charge a 1.5% fee for instant transfers. Venmo on the other hand also provides free transfer of money via bank accounts, debit cards, and direct deposits, while charging 1% to 5% for check deposits. Both apps charge a 3% fee for any transactions made via credit card.
Credit Limits
Cash App limits unverified users to $250 per week and $1,000 per month. Unverified Venmo users can transfer up to $299.99 per week. Verifying your account on either app increases these limits substantially. Cash App has a monthly limit of $10,000, while Venmo has a weekly limit of $4,999.99 to $6,999.99.
Funding Methods
Both apps can receive funds via bank transfers, direct deposits, debit cards, and credit cards. Cash App has the additional benefit of being able to transact via Apple Pay and Google Pay. On the other hand, Venmo can accept deposits via check, though faster transfer rates are subject to higher fees.
Platforms
Both Cash App and Venmo run on Android and iOS devices. Their UIs are specifically designed for a mobile interface, and they have ceased support for traditional web platforms. If you wish to use them on the PC, you’ll need a mobile system emulator.
Availabillity
Venmo is available only in the U.S. and users can only send funds to other Venmo users in the U.S. On the other hand, Cash App has started in the U.S. and expanded to the U.K. allowing for cross-ocean sending, albeit in only these two countries. If you need to send money to someone outside of the U.S., an international service is typically much better.
Which One Is Better?
This ultimately comes down to personal preference. Users with an interest in Bitcoin might find Cash App more appealing, though the lack of in-depth tools can be a downside. Venmo offers a social aspect to giving and receiving funds, but some may not appreciate having their transactions open to the world.
If you want to use a digital wallet to transfer funds between friends and family, Venmo might be the better choice. The interface is simple, transfers are straightforward and you can keep track of payments via its social networking feature.
For expanded functionality and features, you’ll likely favor Cash App. It has a simple way to invest for those who want to try it out, and the ability to pay taxes online is always welcome.
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