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Mobile payment platforms are cost-effective for small and medium-sized businesses to accept customer payments. However, it’s important to weigh every aspect of a payment service provider to find the right fit for your business. In this guide, we’ll look into Cash App business account fees associated with Cash for Business — the business app from Cash App.
To help you determine what’s best for your business, we reviewed Cash App’s free features and estimated transaction fees below. Let’s dive in!
Navigating Cash App Business Account Charges
Payment processing fees exceed the percentage or fixed rate charged per transaction. You must also consider setup fees, monthly subscriptions, chargebacks, dispute costs, and transfer and withdrawal fees. Other fees may include payment protection, integrations, and hardware and software costs.
However, if you only compare credit card fees when choosing your provider, you may miss out on other important considerations — cost is not everything. Take the time to thoroughly research how service fees compare to customer service reviews and other business transaction features.
Below is a look at Cash App’s business account fees to give you an idea of the P2P payment platform’s pros and cons.
Startup Fees
There are no Cash App fees for business account setup or registration. Cash App only deducts processing fees once you start using Cash for Business to accept customer payments.
Processing Fees for Money Received
Cash App allows consumers to pay using payment links or QR codes. You can hold up your mobile phone or print out your QR code for customers to scan.
Alternatively, you can create a payment link using your $Cashtag and share it via text, email, messaging, or embed it on your website. Clicking on the link directs your customers to a Cash.me page to complete the payment by entering card details or logging into their Cash App account.
Cash App has a straightforward fee structure of 2.75% per transaction, deducting the fee before the payment reaches your account.
Instant Transfers
While the Cash App business account’s payment processing fees are somewhat higher than those of other payment platforms, they do not charge business account users to make instant transfers to their linked debit accounts.
One of the reasons for this is that business account users cannot use a Cash App debit card from their business account. This means that if you want to spend funds from your business account, you must:
- Transfer funds to your personal Cash App account to use your Cash Card
- Transfer funds to your linked bank account
- Pay via the app
ATM Withdrawals
As mentioned above, you cannot use a Cash Card with a business account. If you transfer funds to your personal account to withdraw money at an ATM, you’ll pay two dollars per withdrawal. However, Cash App waives ATM fees if you receive more than $300 in direct deposits through the app monthly.
Chargebacks and Disputes
While Cash App does not specify chargeback fees, it does outline the following in the Cash for Business Terms and Conditions:
“If you have pending chargebacks, we may delay payouts to you. If you lose a chargeback, you agree to pay us the full amount plus any fees, and we can debit your linked bank account to recover the money you owe.”
In addition, Cash App states that an excessive number of chargebacks may lead to account suspension.
Tax Reporting Limits
Tax law requires anyone receiving income from goods or services over $600 annually through Cash App (or any other payment platform) to report their income. This applies to all businesses, including sole proprietors, home businesses, freelancers, and services such as plumbing or hairdressing.
To ensure IRS compliance and assist business account users in meeting these requirements, Cash App issues a Form 1099-K to all qualifying users.
Cash App Business Account Fees vs. Other Platforms
When assessing Cash App business account fees, you should consider how limitations may affect your business operations. Remember that not all payment platforms are created equal, and they certainly cannot be compared as apples to apples. Some have fees while others don’t, but they may be extremely limited in their available options.
Cash App reserves the right to increase its fees, delay payouts, request information, and freeze your account if it suspects any activity that may challenge the service terms and conditions. The platform also has a high payment processing fee. Here’s how other platforms compare:
Venmo Fees
Venmo’s fee structure is more complex than Cash App’s. Venmo charges 1.9% + $0.10 per transaction. In addition, Tap to Pay or contactless payments are charged 2.29% + $0.10, while credit card payments have a 3% fee.
Although Venmo business fees are mostly lower than Cash App, the platform charges an instant deposit fee of 1.75%. Standard transfers are free but take one to three business days to process.
Venmo offers purchase protection, tax documentation, and refund services and integrates with PayPal, Shopify, and Braintree for online and eCommerce setups.
Zelle Fees
Zelle does not charge a fee, and funds are immediately available in your bank account. The service, however, is very limited and does not allow you to accept credit card payments or integrate with eCommerce setups. It also offers no refund service, tax documents, or purchase protection. Zelle is only available in the US.
Note that although Zelle does not charge fees compared to Cash App, your bank or credit union may add their own fees.
PayPal Fees
PayPal is known for its high fees; however, in terms of service, integrations, and functionality, the platform outdoes its competitors. Although, the service has a payment structure that can be confusing and complex. Since the platform facilitates international payments in multiple currencies, fees may vary according to country and currency.
US business transactions range between 1.90% + $0.49 for QR code transactions over $10 and 2.99% + $0.49 for standard online credit and debit card payments. PayPal offers eCommerce integration and its POS service using Zelle. It also enables customers to pay with Venmo and supports multiple business integrations.
In addition to PayPal fees, your bank may charge payout fees when depositing money to your linked bank account. You may also pay for extra services like recurring payments, fraud protection, chargeback protection, and a virtual terminal.
Optimizing Your Business Payment Platform
Cash App’s Cash for Business is a convenient solution for small business owners with low-volume sales. New businesses that are not ready to invest in a complete payment solution may find the platform beneficial. However, as your business scales, the app’s high fees, limited payment options, and lack of features can significantly hinder growth. In addition, Cash App’s requirements to issue receipts for transactions over $15 and request customer signatures for transactions over $25 can be a hassle.
If you’re searching for a flexible payment solution to support business growth, consider working with PaymentCloud, a merchant service provider specializing in zero-cost processing. We enable businesses of any size and type to accept all payment types — from credit cards to QR codes and online payment options — you’ll never sacrifice quality again.
We work for you.
So, you will always get a fair deal!
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