Our Take
The bottom line:
Cash App for Business is a convenient way for sole proprietors, single-member LLCs and nonprofits to accept digital payments on the go — no hardware required. However, due to the 2.75% transaction fee, businesses completing dozens of transactions per day might be better off using a payment processor with lower in-person costs.
Cash App for Business
Payment processing fees
2.75%
Monthly fee
$0.00
Pros & Cons
Pros
- QR codes make it easy for customers to find your account and pay.
- Automatically sends the appropriate tax forms at the end of the year.
- Provides access to additional personal account features, like stock trading.
Cons
- Transaction fees are higher than those of some other payment apps.
- Transfers may take up to five business days.
- Comes with specific receipt requirements.
Full Review
Cash App is a peer-to-peer money transfer app created by Block, Inc. Sole proprietors, single-member LLCs and nonprofits can create a Cash App business account, also called Cash App for Business, to take payment from customers. Accepted payment methods include debit cards, credit cards , some prepaid cards and Cash App balance transfers.
Cash App business accounts previously offered instant transfers to a linked debit card for free — a big advantage over other P2P competitors. But now, similarly to PayPal and Venmo, they charge an additional 0.5%-1.75% fee for them. Otherwise, deposit timing varies from one to five business days.
Cash App makes it easy to share your business’s payment information with customers. Shareable, unique URLs called $cashtags direct customers to your account so that they can complete digital payments from their phones. You can also create a unique QR code, and customers can look you up by email or phone number as well.
Cash App business accounts are best for businesses that:
- Sell goods at pop-up events and markets: Money transfer apps are an especially convenient way for mobile businesses to receive payment, no matter where they set up shop. Plus, they don’t require hardware. All you and your customers need are your phones.
- Prefer to transact via QR code: Customers can scan your business’s unique QR code to pay you through Cash App, making transactions quick and contactless.
Deciding factors
Payment processing model | Flat rate. |
Payment processing fees | 2.75% per transaction. |
Monthly fee | None. |
Hardware cost | Cash App does not sell hardware, but does integrate with Square registers and terminals. Money transfers and card transactions are completed digitally through the app. |
Contract length | No contract. |
Customer support | Phone support available every day from 9 a.m. to 7 p.m. EST. Chat support is also available through the app. |
Where Cash App business account stands out
QR code payments
You can use your Cash App business account to receive a unique QR code that directs customers to your account, so that they can quickly pay you (and be sure they’re paying the right person). Business owners can display the codes at pop-up shops or other venues, and they don’t require any hardware outside of a smartphone.
Tax documentation
Cash App for Business accounts that exceed $20,000 in gross sales or 200 business payments in a tax year will receive the appropriate tax documentation, which can help save time during tax filing season. If you have a Cash App for Business account and use a Square point-of-sale (POS) system, the payment total will be aggregated and reported on each 1099-K form.
Unique features — for personal accounts
Cash App requires business owners to create a personal account first, and it comes with some unique capabilities (outside of digital money transfers). For example, you can use Cash App to buy stocks with funds in your personal account balance. If you’re new to investing, it’s a simple, low-cost way to dip your toes in the water. You can also file your taxes with Cash App for free (it doesn’t, however, support filing business returns for S-corps, C-corps or multi-member LLCs).
Since you use the same login information for your personal and business accounts, it should be easy to switch back and forth between the two. That being said, it’s important to keep your business and personal transactions separate for tax purposes, so make sure you double-check which account type you’re in when using the app.
Where Cash App business account falls short
Transaction fees
The Cash App business account comes with transaction fees, as is typical with peer-to-peer business accounts. You'll pay a fee of 2.75% per transaction, which is higher than some competitors' rates. For example, Venmo charges 1.9% plus 10 cents for payments funded by customers’ Venmo account balances. Zelle leaves fees up to banks instead of charging businesses directly, but most opt to limit your number of transactions instead. (Bank of America’s daily cap is 20, for instance.)
Direct deposit timing
Cash App funds are made accessible in anywhere from one to five business days. One to two business days is pretty standard in the industry, so the possibility that you may have to wait up to five can throw off cash flow. If five business days have passed and you still haven’t received your funds, Cash App suggests reaching out to their support team.
Receipt requirements
Cash App requires businesses to offer a receipt for transactions over $15 (receipts can be shared via web link). In addition, it requires businesses to give customers the option to sign (or decline to sign) for purchases over $25. This isn’t the worst thing, but it’s certainly an added step to consider, especially if you’re mostly making sales on the go.
How to set up Cash App business account
Before you can have a Cash App business account, you need to set up a personal account with the money transfer app. You start by downloading the app to your phone. Then, you add your phone number or email address and connect to your bank account, so that you can access and receive funds.
From there, you go to your account profile, select the “create a business account” option and select which type of business you own. You’ll go through an identity verification process and, in some cases, provide your business’s EIN. Cash App will show a green badge in your profile when the process is finished.
Cash App business account fees
Setting up a Cash App business account is free, and you’ll pay 2.75% of each transaction. Know that Cash App business accounts are liable for additional fees for processing chargebacks and investigating their legitimacy, which is not the case for every payment processor. (Square, also owned by Block, doesn’t charge such fees, for instance.)
can incur. Cash App has not disclosed the fee rates for these scenarios. Typically, payment processing companies charge $15-$25 per chargeback.
Cash App for business vs. personal
Other than the setup process, the biggest difference between a Cash App business account and personal one is simply transaction fees: personal transactions don’t incur any fees, whereas business transactions do. Additionally, Cash App sends businesses a Form 1099-K for tax purposes.
Cash App business account alternatives
Zelle
Zelle offers free fund transfers, and small businesses can use the app for payments if their business bank accounts support the integration. Users can send and receive money, and funds are usually available within minutes. But payments are limited to the U.S., and you'll have to calculate your taxable income.
Venmo
Venmo's business account is similar to the Cash App business account in that it lets customers transfer funds digitally or pay with a card. Plus, people can search for your account by business name or scan a custom QR code that takes them directly to your payment page.
Cost:
- 1.9% plus 10 cents per transaction between Venmo accounts.
- 2.29% plus 9 cents per contactless “Tap to Pay” payment.
- 1.75% fee for instant transfers.
PayPal
PayPal lets customers choose between transferring funds, paying with a card or using "buy now, pay later." In addition to online checkout integrations for e-commerce purchases, it offers in-person POS options, like the Zettle card reader, for brick-and-mortar businesses. You can also use it to send invoices.
Cost:
- 2.29% plus 9 cents for in-person credit and debit card payments.
- 2.59%-2.99% plus 49 cents for online credit and debit card payments.
- 3.49% plus 49 cents for PayPal Payments transactions (PayPal, Pay Later, Pay with Rewards, Venmo).
New elevated offer
