When sending and receiving money, you need to know whether the platform you use charges any transaction fees.
Most transactions on Cash App are free; however, some come with a minimal fee. Why does Cash App charge a fee? Continue reading to find out why Cash App charges a fee on some of its services, and more!
Why Does Cash App Charge A Fee In 2023
1. If You Have A Business Account
Cash App charges a fee on your account every time you receive money if you have registered it as a business account.
When signing up for a new account, users can open either a business account or a standard cash account.
With a Standard account, Cash App will not charge you to receive money.
However, if you set up Cash For Business, you will be charged a 2.5% fee per transaction every time you receive money. In addition, they also charge a 2.7% fee if you accept credit cards.
Luckily, if you don’t want to keep paying the fee or don’t need a business account, you can easily switch your profile to a Standard Cash account.
Furthermore, to switch accounts, you’ll need to contact Cash App customer support on the app. Next, select “Personal profile,” then “Support,” and follow the prompts.
Unfortunately, switching your account back to a personal one may take some time because Cash App can take time to respond to customer queries.
2. ATM Transaction Fees
One advantage of using Cash App is that the Cash App card acts as a debit card; therefore, you can use it to pay for items and services as well as withdraw money from the bank.
Since Cash App does not have its ATMs, customers withdraw cash on bank ATMs.
Furthermore, to make this possible, Cash App has to have a fee that goes to the bank.
So, because of this, ATM withdrawals using the Cash App card are subject to a $2 fee.
However, this fee is waived if you receive more than $300 in direct deposits in one month, therefore, customers can avoid paying these fees.
3. To Fund Innovation
Cash App needs to continuously innovate to keep up with its competitors, such as PayPal and Venmo.
So, to invest in the app’s development, Cash App needs money; therefore, they need to charge customers a fee on some of the services.
4. To Cater For Expedited Payments
If you want to transfer money, you may or may not pay any fees. Cash App does not charge you any money when you choose to use the standard deposit time of two to three days.
However, if you want to transfer the money immediately without waiting for three days, Cash App offers Instant deposits that are subject to a 0.5%-1.75% fee.
Furthermore, the company also has a minimum fee of $0.25.
So, when you use this service, the money will instantly be deposited in your debit card, but at a cost, therefore, Cash App has to charge for this service.
5. They Provide A Platform For Investors
In 2017, Cash App started allowing users to trade in Bitcoin using the platform. Although at first there was no charge, in 2019 a new fee was introduced.
Furthermore, the fee will be included when selling and buying Bitcoin on Cash App before you complete the transaction.
Additionally, this fee changes depending on the mid-market price; therefore, it will not always be the same.
6. Credit Card Services
If you want to send money via Cash App using a credit card instead of your linked bank account, you’ll have to pay 3% off the total amount.
Furthermore, Cash app supports credit cards but charges for providing this convenience to its users.
Therefore, if you don’t want to pay an additional fee when transacting on Cash App, it might be better to send cash using your bank account.
7. To Generate Revenue
For Cash App to continue operating, they need to generate revenue to sustain its operations.
Furthermore, since the financial services sector is evolving fast, Cash App needs money to sustain the business, because of this, it has to charge a small fee for some of its services.
To know more, you can also read our posts on what is Cash App, does Cash App report to the IRS, and does Cash App have fees.
Cash App is popular among users because it’s free to download and does not have charges on most of its services. However, you need to know that some services have fees.
Furthermore, Cash app charges a fee to expedite payments, ATM withdrawal, credit card payments, Bitcoin trade if you have a business account, and to generate revenue. Therefore, if you notice that you have been charged a fee, you will know it was for one of these services.