Money Transfer Confrontation: Square Cash Vs. Venmo Vs. PayPal

With peer-to-peer payment services like Square Cash, Venmo, and PayPal, you no longer have to carry cash with you. With these mobile apps, distributing checks, returning money to friends, and lending money to family members is as easy as the touch of a finger. Let’s take a look at them and decide which one is superior to the others.

Availability

Square Cash , Venmo, and PayPal have free apps for iOS and Android devices. Sign up for each service quickly and for free, and you only need a data connection or Wi-Fi to use them. Square Cash is available to residents of all 50 US states , but not US territories at the time of this writing. You must also be 18 years old and reside in the United States to use the service. Venmo is also available in all 50 US states . PayPal, on the other hand, is available worldwide in over 200 markets and 26 currencies.

Fees and limits

Subscribing to all three services is free, as is downloading the respective apps, but each service has different sending and receiving fees that you should be aware of.

Square Cash transactions are free, but only for linked debit cards. You can now use credit cards with the service, but there is a 3% fee per transaction. However, you can’t directly connect to a bank account like you can with Venmo and PayPal, or keep your balance in Square Cash itself. You will also have an initial $ 250 weekly money limit and a $ 1,000 limit on receiving in 30 days. If you try to send more than $ 250 per week or receive more than $ 1,000 in 30 days, you will be prompted to verify your identity with your name, date of birth, and the last four digits of your SSN. Once verified, the number of free transactions is capped at $ 2,500 per week, and there is no limit to the amount of money you can receive.

Venmo transactions are also free if you use a linked debit card, linked bank account, or Venmo current balance. If you choose to use a credit card, you will receive a 3% commission, just like Square Cash. However, Venmo’s transaction limit is different from the Square Cash limit. You’re capped at $ 299.99 per week unless you verify your identity by linking your Facebook account or adding your zip code, the last four digits of your SSN, and your date of birth, which increases your limit to $ 2,999.99.

PayPal transactions to your bank account or from your bank account or current PayPal balance are free, but there is a 2.9% (plus 30 cents) fee on debit and credit card transactions. If you want to pay someone with your debit card and avoid commissions, you will need to deposit funds into your PayPal account using a debit card and then transfer those funds to the recipient. However, PayPal does not have weekly transaction limits.

Using each service

The Square Cash, Venmo, and PayPal apps allow you to do much the same thing: pay or request money from others by name or mobile number. You can do this in the app, via email, or through your web browser. However, each service has its own characteristics.

In addition to the basics, Square Cash allows you to send and receive money using $ Cashtags . Your $ Cashtag is a unique display name that allows you to pay and receive money anonymously. The $ Cashtag requirement is not required to use Square Cash, but for non-Square Cash users, this is the easiest way to pay you. All they have to do is go to Cash.me/ [your $ Cashtagname], sign in if they have a Square Cash account, or enter their credit or debit card if they don’t exist, enter the amount and click Pay “. If you have a debit card linked to your Square Cash account, payments are usually transferred instantly. However, it may take up to two days for some payments to be fully transferred.

Venmo and PayPal work similarly to Square Cash when it comes to using their apps, but in different ways when it comes to how they handle your money. Venmo and PayPal keep the money sent to you as a balance in a dedicated account, instead of depositing the money directly into your bank account or crediting your debit card. For example, if someone sends you $ 20 as your first Venmo transaction, it will be added to your Venmo funds and your balance will be $ 20. If you then decide to send $ 10 to your cool friend Patrick to return his lunch, Venmo will use $ 10 of your available balance and you will have $ 10 left in your Venmo balance. However, if you need those $ 20 in your real bank account, you will have to take the extra step of withdrawing Venmo funds. It’s the same with PayPal. Venmo and PayPal transactions are instant if the sender uses bank funds, but it can take up to two days with Venmo and three to four days with PayPal to withdraw funds to your bank account.

Venmo also has a news feed-like setting that displays the latest transactions of all your friends. You can even comment or like the listed transactions if you like. When you make transactions, other people in the Venmo community (Facebook friends and random people) can also see who you paid and why (not the amount). For many, the added social element of Venmo is not much, but you can always verify your account without Facebook, or keep individual transactions private. If anything, Venmo’s transaction feed is a great place to joke (“Patrick Allan paid Johnny Hammerstick: original copy of the Star Wars Holiday Special”).

PayPal has several advantages over its competitors due to its size and global status. You can send money to almost anyone in the world (in 25 different currencies), but Venmo and Square Cash are stuck in the states cash exchange. PayPal also allows individual transactions of up to $ 10,000, which exceeds the weekly limit for Square Cash and Venmo combined. If you are going to transfer big money between yourself and your immediate environment, PayPal is what you need. The main disadvantage of PayPal, of course, is the fee for paying someone directly from your debit card and not from your PayPal funds or bank account, and the sender decides who pays the fee.

Safety

Square Cash, Venmo, and PayPal all adhere to the Payment Card Industry Data Security Standard (PCI-DSS) Level 1, which is the same security standards created and supported by companies such as Visa, MasterCard, and American Express. This means that information sent to each company’s servers must be encrypted and securely sent, and each service has round-the-clock protection against fraud and risks. While no digital transactions are 100% secure, your transactions with all three of these services are about as secure as using your debit or credit card at the grocery store (which, again, is never 100% secure).

It should also be mentioned again that Venmo is trying to make cash transactions a social event. While this is not necessarily a security threat, it is definitely not very confidential. For example, the Vicemo website shows you a collection of all of Venmo’s public transactions related to the purchase of drugs, alcohol or sex. If you conduct public transactions, literally everyone can see them. If you opt for Venmo, you might consider avoiding the social aspects of the service by making all your transactions private (or using Square Cash or PayPal instead). Given the fact that linking your Facebook account is one way to verify your Venmo account, this is something to keep in mind.

The biggest threat to your financial security with any of these services is of course someone with physical access to your phone or tablet. Luckily, you may need a PIN to open and use the Venmo and PayPal apps (in addition to your phone’s security code). Venmo and PayPal also offer two-factor authentication via SMS text message. Square Cash doesn’t yet have any of these options built in, but you can set it up to ask for your debit or credit card security code for every transaction, or receive a text message sent to you every time a transaction is made to your Account. However, if you have iOS and iPhone 5s or newer, you can use Apple Touch ID for an extra layer of app security with all three services. If we had to choose which of these services is the “most secure”, then it would probably be PayPal (since it is, in fact, a full-fledged international bank), and we have explained why in the past .

Bottom line: Venmo for social media, Square Cash for anonymous, simple transfers, and PayPal for most users, currencies and options.

If you’re looking for a P2P money service that’s right for you, it’s not difficult. Square Cash, Venmo and PayPal have their own strengths:

  • If you want easy, social and fun cash transactions, choose Venmo.
  • If you want to transfer money to friends and family around the world, or if you need a one-stop money service, use PayPal.
  • If you want the easiest way to transfer money for friends and family, or just transfer money anonymously, use Square Cash.

However, when all is said and done, you’re probably better off using the service that most of your friends and family use – it’s as easy as shelling pears. Of course, there is no rule that you can only use one service. PayPal has a major added bonus of allowing you to buy items from retailers and other businesses in addition to being a reliable money transfer option. My friends and I all use Square Cash to pay for each other, but I use PayPal for a lot of other things too (okay, mostly ordering food). Each service is better at different things, but this makes each one a great tool for your financial instrument.

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