PayPal Vs CashApp

About Author: Hi, I’m Quinn Askeland. In 2014, I started Transumo after experiencing expensive, slow, and frustrating international money transfers and payments through banks. Once I discovered how to manage my own international currencies much better, I became driven to help others improve their transfers and payments. Fortunately, today, there are many excellent options. See My Full Bio.

Do you want to send and receive money online with ease and convenience? We hear you.

PayPal and Cash App are two of the most popular payment apps. They offer a variety of features and benefits, but they also have some key differences.

paypal vs cashapp - comparison review
  • PayPal has a trusted reputation and offers a diverse range of services, with options to send money to bank accounts, PayPal accounts, or mobile wallets.
  • Cash App provides simplicity and speed with options for bank account transfers, debit card payments, stock investment, and even Bitcoin transactions.

In this article, we will compare PayPal vs CashApp in terms of fees, speed, security, and customer reviews.

Let’s get into it!

Disclosure: This post contains affiliate links, which may save you and do not cost any more. For more information, see my disclaimers here.

1. Snapshot

Paypal and CashApp are both trustworthy money transfer and online payment services. However, both have ‘Bad’ Trustpilot ratings of 1.3/5 and 1.2/5 respectively. Paypal is notable for its diverse services while Cash App offers features for stock and Bitcoin transactions.

PayPalCashApp
🏛️Established1998, California (the US)2013, California (the US)
💁🏼‍♂️ClientsPersonal and BusinessPersonal and Business
💱Currencies25 global currenciesUSD and GBP
⚖️RegulationRegulated in the USRegulated in the US and UK
⭐Reviews“Bad” – 1.3/5 on Trustpilot with over 27,000 reviews (January 2024)“Bad” – 1.2/5 on Trustpilot with over 4,100 reviews (January 2024)
💰FeesDepends on the target currency, funding method, and amountDepends on the funding method, market conditions, and withdrawal methods
🌐Official WebsiteVisit PayPalVisit CashApp

2. What is PayPal?

PayPal is a digital wallet and payment service (domestic and international) that’s available worldwide. 

You can use PayPal for domestic money transfers to friends, family, and trusted businesses in the US as well as you can use PayPal to send money abroad in 25 global currencies. 

PayPal can be used by individuals as well as businesses across many industries such as brick-and-mortar, e-commerce, online service providers, etc. 

PayPal can be easily integrated into an e-commerce website to accept payments in multiple currencies and they also offer a point-of-sale device for collecting card and other payments for offline transactions.

PayPal also owns Xoom (read our Xoom review) – ideal for cash and bank transfers globally – as well as Venmo (review) – instant mobile payments in the US.

PayPal Pros

Fast and free PayPal to PayPal transfers

Widely Accepted (available in 200+ countries and used mostly by online merchants)

Supports transactions in 25 global currencies

Available for personal and business accounts

PayPal Cons

Confusing fees

Potential for high fees

Customer service

Unable to handle large amounts

Withdrawing funds to a bank account takes time

3. What is CashApp?

CashApp (review) is a digital wallet that functions like an online account in the US and UK (but it’s not a bank). 

You can send and receive payments in your CashApp account, invest in stocks, buy cryptocurrency, and use the Cash App debit card to make purchases online and offline (and withdraw money from ATMs)

CashApp is available for both personal use and businesses.

It’s free to use CashApp as a personal user for local transfers (unless you need instant transfers or withdrawals – learn more about the fee breakdown below). 

Currently, CashApp supports transfers between US and UK users only at the mid-market rate.

CashApp Pros

Free to use for personal transfers

The money you hold on Cash Card can be FDIC-insured up to $250,000 USD (only in the US)

Stock investing option

Buying and selling of Bitcoin

Offers a Visa debit card

Offers discounts and cash back

Available for personal and business

CashApp cons

Set up for small transfers only

Only available in US and UK, thus supports only USD and GBP

4. PayPal vs CashApp: Fees

PayPal

Personal transfers (local)

PayPal to PayPal transfers – Free for balances you hold

Funded by a bank – ACH fees apply in the US

Funded by credit card – 2.9% of the amount plus a fixed fee

International personal transfers

Fixed fee – between $0.99 and $4.99 USD/GBP/AUD/CAD

Currency exchange fee: 3-5% above the mid-market rate

Sending and receiving bank fees – depends on the country and currency pair

Card fees – 2 – 4.99 USD + 3.4 % of the amount and fixed fee (depending on the country

Business payments (local and international)

PayPal checkout online – 1.5% + fixed fee (based on currency)

Receiving domestic transactions – 2.59% – 3.09% + fixed fee

Interchange plus fee – Interchange Pass-through Costs + 0.49% + fixed fee

Other fees – 0-30USD or 0%-5% depending on the activity

CashApp

Personal transfers (local)

CashApp to CashApp transfers – Free

Standard transfers (3-days) – Free if sending from balance you hold

Instant transfers – 1.5% of the amount

Funding with a card – 3% of the amount 

Business transfers (local)

For every payment received – 2.75% of the amount

No rush fee for instant transfers 

International transfers (personal and business) between US and UK only

Transfers at the mid-market rate

Sending and receiving bank fees/card fees may be applicable

Other fees 

At in-network ATMs – $2.50 per withdrawal

Out-of-network ATMs – $2.50 + operator fees

In-network ATM withdrawal fees can be waived if you deposit at least $300 USD into your CashApp account every month.

Winner: Tie

CashApp and PayPal’s local transfer fees are at par with each other provided you hold some money in your account. 

For international transfers, CashApp would have been a cheaper option but currently, they only serve the UK and US.

5. Alternatives

Venmo

While Venmo is owned by PayPal, it operates as a separate service. Venmo is good for small money transfers, and it doesn’t charge you anything to send or receive money from your Venmo balance. You can also get a Venmo debit card that works with MasterCard and can be used anywhere in the US. Check out our Venmo vs CashApp comparison which are very similar services with some important differences.

Zelle

Zelle can be a good alternative to PayPal and CashApp, as it offers the same benefits of convenience, speed, and security. You can use Zelle to send money to people and businesses you trust, without paying any fees. It works well for small or medium amounts, like paying back a friend or buying something online. So, for free and instant transfers, Zelle might be better.

Zelle is also helpful if you run a small business and you need to pay your suppliers fast and easy.

What’s interesting is you can use Zelle from your bank app or website, with the same security and protection you trust. You can read our Zelle review here to know if Zelle is the right one for you.

6. PayPal vs CashApp: Transfer Speed

PayPal

PayPal to PayPal transfers are instant if you send money from a balance you hold.

Transfers are also instant if it’s funded with a credit card. 

If it’s funded with a bank account and is being sent to your recipient’s bank account, the whole process can take 4-5 days. 

Essentially, after the money is received in your recipient’s PayPal wallet, it takes 2-3 days to be withdrawn to their bank account. 

Typically, the sending and receiving banks are responsible for the delay in this case. 

Instant withdrawals are available for a small fee.

CashApp

CashApp to CashApp transfers are instant.

Standard transfer to a bank account: 1-3 business days 

Instant transfer to a debit card is also available by paying a rush fee.

Winner: Tie

Both CashApp and PayPal are at par in terms of transfer speed for wallet transfers and transfers to a bank account.

7. PayPal vs CashApp: Business Account

PayPal

Available for business for all types

E-commerce businesses can integrate PayPal on their checkout pay to get via a number of methods and currencies.

Service providers and consultants can get paid by creating an invoice on PayPal

Brick-and-mortar businesses can get paid using PayPal’s point-of-sale system (called Zettle) and a device that accepts almost all kinds of payments. 

This system also helps to maintain inventory and share business metrics (best-selling products, customer life cycle, etc.)

CashApp

Designed for small business owners and entrepreneurs.

Small businesses can get paid easily by sharing their CashApp QR Code, $Cashtag, or email/phone number associated with their account.

Winner: PayPal

PayPal offers many options for businesses to get paid – whether you operate locally or internationally.

CashApp is only available in the US and UK and has very low spending limits, which can be a bottleneck for growing businesses.

8. PayPal vs CashApp: Security

CashApp

  • CashApp is regulated by the FINRA in the US and the FCA in the UK
  • Security PIN, Touch ID, or Face ID verification makes logging into their app and website secure.
  • PCI-DSS Level 1 certification means all payments with the CashApp debit card are secure
  • Push, email and text notifications alert you of all account activities 
  • Bitcoin is stored in offline servers

PayPal

  • PayPal is regulated by the Federal Trade Commission in the US as a money transmitter, on a state-by-state basis. In the UK, they’re regulated by the Financial Conduct Authority, and by APRA and AUSTRAC in Australia.
  • TLS and Https technology for secure connections to PayPal’s website
  • One-time password (OTP) for their mobile app
  • Fraud detection team to audit transfers and keep your money safe
  • Great buyer protection based on Payment Card Industry Data Security Standard (PCI-DSS) standards (required for credit or debit card transfers or purchases)
  • Email notifications for all transfers and swift investigation for unauthorized transfers (if applicable)

Winner: Tie

Far as we can tell, both PayPal and CashApp have taken all possible security measures to keep your money and data safe as regulated financial institutions.

9. PayPal vs CashApp: Third-party reviews – Can You Trust Them?

PayPal

PayPal is rated 1.3/5 on Trustpilot with over 26,000 reviews, which is shocking for a trusted service that has existed for 20+ years. 

With only 5% positive reviews and 87% negative reviews, we were curious to get to the bottom of it. 

According to the positive reviews, people love PayPal’s buyer protection which keeps you safe against fraudulent merchants. 

We also noted some PayPal payment loyalists who have been with the platform for 10+ years and love the ease of setting up transfers with them. 

Now the negatives:

  • Many hidden fees

Most reviewers who had a negative experience were frustrated with PayPal’s high fees and unexpected hidden charges. 

It’s true – PayPal’s charges are complex and it can be difficult to figure out what you’re paying. 

We’ve tried to break down what you’ll pay with PayPal in the “Transfer Fees” section above – get more clarity on PayPal International Transfers here.

  • Poor customer service

Customer service was also a prominent pain point for many. 

From delays in response to unclear solutions – their users were dissatisfied with how PayPal responded during a transfer or payment crisis. 

We reckon this is partly due to the number of people they serve – currently 426 million people globally, which is huge.

CashApp

CashApp is rated 1.3/5 on Trustpilot with over 3,900 reviews – which kinda looks bleak. 

And not surprisingly, only 3% of those reviews are positive and a whopping 93% are negative. 

So what’s going on here?

After a deep dive, here’s what we found:

The handful of positive reviews talk about the convenience of using CashApp as a checking account or the CashApp debit card for small purchases. 

Now the negatives:

  • Fraudulent transactions

Many users noticed fraudulent transactions in their CashApp accounts and struggled to get their money back.

The good news is, if you’re in the US, the money you hold in Cash Card is protected by the FDIC up to $250,000.

Another way to keep your account safe is to avoid sending money to people or businesses you don’t know or trust. 

  • Poor customer service

According to the reviews, CashApp’s customer service takes hours if not days to get back to you after you share your complaint with their chatbot. 

This can be especially distressing if you’re experiencing a security breach or a delay with your transfer.

  • Reviews

CashApp claims to be the highest-rated financial app on the App Store which is true but they do have negative reviews on other sites. 

This apparently causes users to lose trust in the service, especially after having a bad experience with the service.

Winner: Tie

While it is true that people with complaints are often more likely to write a review, Trustpilot reviews show both CashApp and PayPal are not perfect. Overall, judging by the reviews, PayPal’s high fees are to blame for the low ratings. CashApp meanwhile seems to have more complex challenges. It appears both could do better for customer service.

Verdict

With 4 ties and 1 win for PayPal, it really comes down to your needs.

Paypal stands out in coverage and a diverse range of services especially for online shopping, buy now pay later, and dispute resolution. However, it’s important to note that PayPal also charges more fees and charges relatively high fees for overseas transfers.

On the other hand, Cash App is better for peer-to-peer payments, stock investments, and Bitcoin transactions.

In conclusion, PayPal and Cash App have different strengths and weaknesses. To determine which service is best for you, you should compare them closely in terms of features(above), fees(above), and speed(above) based on your specific transfer needs and preferences. You can also look into other providers(above) that offer more affordable and faster transfers without compromising customer experience.

Happy transfers!

What are the pros of Paypal?

Using Paypal has some pros, such as its wide acceptance in over 200 countries and 25 currencies, which makes it versatile and handy. It also offers speedy transfers within Paypal accounts. However, using Paypal also has some downsides, and there can be some better alternatives.

Can you use Cash App internationally?

No, Cash App does not support international transfers, as it is limited to the US and UK only. However, you can transfer between the US and UK or choose from other providers that have cheaper fees with favorable exchange rates.

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