Overview of Cash App’s Business Model
Cash App is a mobile payment platform owned by Square Inc., a financial services and mobile payment company founded in 2009. Cash App enables users to quickly and easily send and receive money, as well as invest in stocks, exchange-traded funds (ETFs), and cryptocurrency. In addition, Cash App offers subscription services such as “Cash Boost” and “Cash Card”, and partners with other companies to generate additional revenue. But how does Cash App make money? Let’s take a closer look at the business model of this popular payment platform.
What Is Cash App?
Cash App is a peer-to-peer payment platform that allows users to send and receive money from friends, family, and businesses. The app also enables users to purchase stocks, ETFs, and cryptocurrency, as well as access subscription services like “Cash Boost” and “Cash Card”. Cash App is available for both Android and iOS devices, and is one of the most popular payment platforms, with over 24 million active users as of October 2020.1
How Does Cash App Make Money?
Cash App generates revenue through transaction fees, balance transfer fees, ATM withdrawal fees, investments, advertising, and partnerships. Let’s explore each of these income streams in more detail.
Exploring the Fees Associated with Cash App Transactions
Cash App charges its users a fee for certain transactions, such as sending or receiving money. The fee is typically 1.5% of the total amount sent or received, with a minimum fee of $0.25 per transaction. For example, if you send $100 via Cash App, you will be charged a fee of $1.50.2 Cash App also charges a fee for balance transfers. The fee is typically 2% of the total amount transferred, with a minimum fee of $0.25 per transaction. Additionally, Cash App charges a fee for withdrawals from ATMs. The fee is typically $2.50 per withdrawal, plus any fees charged by the ATM provider.3
Examining Cash App’s Investment Strategies
Cash App allows users to invest in stocks and ETFs, as well as buy, sell, and hold Bitcoin and other cryptocurrencies. Cash App makes money through trading commissions, which are typically between $1 and $10 per trade. Although Cash App does not charge a commission for buying and selling Bitcoin, it does charge a fee for converting Bitcoin into another currency.4
Analyzing Cash App’s Advertising Revenue Streams
Cash App generates revenue through targeted ads and sponsored content. Targeted ads are served to users based on their activity and interests, while sponsored content is paid posts from third-party brands. Cash App also works with influencers to promote its products and services on social media platforms such as Instagram and YouTube.5
Investigating Cash App’s Subscription Services
Cash App offers two subscription services: “Cash Boost” and “Cash Card”. Cash Boost allows users to get discounts at certain retailers when they use their Cash Card. Cash Card is a debit card that can be used at any merchant that accepts Visa cards. Both services come with a monthly fee, with Cash Boost costing $9.99 per month and Cash Card costing $4.99 per month.6
Understanding How Cash App Partnerships Generate Income
Cash App has partnered with a number of companies to generate additional revenue. For example, Cash App has a referral program, where users can earn up to $1,000 for referring new customers to the platform. Cash App also partners with companies such as DoorDash and Grubhub to offer discounts to its users. Finally, Cash App has partnered with various banks and credit unions to offer checking accounts and other financial services to its users.7
Conclusion
Cash App is a popular payment platform that enables users to send and receive money, invest in stocks, ETFs, and cryptocurrency, and purchase subscription services. This article explored how Cash App makes money through transaction fees, balance transfer fees, ATM withdrawal fees, investments, advertising, and partnerships. With its diverse range of income streams, Cash App is well-positioned to continue to grow in the future.
References
1. “Square Reports Third Quarter 2020 Results.” Square, Inc., 15 Oct. 2020, investor.squareup.com/news/press-releases/2020/10-15-square-reports-third-quarter-2020-results.
2. “Fees & Pricing.” Cash App, cash.app/help/us/en-us/2737-fees-pricing.
3. Ibid.
4. “How Does Cash App Make Money?” Investopedia, www.investopedia.com/articles/personal-finance/122315/how-does-cash-app-make-money.asp.
5. Ibid.
6. “Cash Boost & Cash Card.” Cash App, cash.app/help/us/en-us/2048-cash-boost-cash-card.
7. “How Does Cash App Make Money?” Investopedia.
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