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In this comparison we will be weighing up the diverse money transfer services offered by two huge FinTech companies, PayPal and Cash App. Both companies were incorporated in the United States and have successfully developed user-friendly mobile applications.
We will kick things off by looking at Paypal, a company that began in December 1998, before the internet made it possible to digitally reimburse friends and family. Originally the company was designed to be a simple electronic alternative to paper payment methods such as cash, cheque and money orders. In 2021, PayPal’s services now cover everything from online credit to cryptocurrency and merchant payment solutions. At the time of writing, the company’s estimated net worth is valued at $327 billion USD, with 400 million users.
Cash App, by comparison, was set up in 2013, 15 years after PayPal came onto the scene. Designed as a mobile money app that allows users to send domestic money transfers to one another effortlessly, Cash App usage is booming, and it has become one of the biggest of its kind with more than 30 million monthly users. In 2018, Cash App extended its services to include customers in the UK, and more recently, the company rolled out bitcoin-enabled transfers. The company has gone from strength to strength, rapidly becoming one of the go-to digital wallets for peer-to-peer payments.
Both brands are ultimately used for the same purpose - to send money online - but we want to know which is the better option when it comes to moving funds across borders.
Which brand has lower fees?
Transferring money internationally can result in large fees which are charged by the service provider: so who is the cheaper option; Cash App or PayPal?
When it comes to money transfers, Cash App is a fee-free service. However, charges still apply for other services, these include:
Customers who use the Cash Out option will be charged a fee of 1.5%
Customers whose chosen payment method is credit card will be charged a fee of 3% of the transfer amount
✅ Verdict: Cash App fees are lower
PayPal’s fee structure is infamously complex and expensive. By comparison, Cash App fees are a lot more straightforward to get your head around.
Which brand offers better exchange rates?
Exchange rates dictate the amount of foreign currency that one denomination can buy or sell, and it is very important to gauge the accuracy of exchange before arranging an overseas payment with any money transfer company.
Cash App is available in the USas well as the UK. To accommodate customers who may request money from friends overseas in either country, Cash App will convert payments from USD to GBP (or vice versa) based on the mid-market exchange rate at the time.
✅ Verdict: It’s a tie
Although Cash App offers 23 less currencies than PayPal, it strives to meet the mid-market exchange rate when possible, for all USD to GBP or GBP to USD conversions. On the flip side, PayPal’s exchange rates are similar to unfavourable bank rates, but they can cater to more currencies than Cash App.
Which brand covers more locations?
In this section we will provide an overview of the countries that these companies support international money transfers to and from.
As it stands, Cash App is only available to customers in the UK and the US. You can check out these cash app alternatives to make an international payment outside of the UK and US.
✅ Verdict: PayPal is heads and shoulders above Cash App
Sending and receiving money transfers with Cash App is a service available to customers in the UK and US only. Compare this to PayPal’s global network of over 200 countries and there is a clear winner.
Which is faster?
This is the part where we identify how long it takes to deliver funds from one account to another using Cash App and PayPal.
Standard transfer: a free service whereby funds are deposited within 1 - 3 business days
Instant transfers: this service is subject to a 1.5% fee (with a minimum fee of $0.25/£0.25) and funds are deposited instantly
✅ Verdict: PayPal wins
Although not perfect, PayPal offers varying degrees of transfer speeds, making it easy for customers to choose the fastest or most convenient delivery method for their payment.
Which brand offers more transfer & payment options?
Some customers may be looking to make an online money transfer, while others opt for cash pick-up or door-to-door delivery. In this section we will look at which brand offers the best options for all kinds of customers.
The following transfer options are available with Cash App:
Standard transfers: details above
Instant transfers: details above
The following payment options are available with Cash App:
Credit or debit card
Bank account
Google Pay
Apple Pay
Cash App balance
✅ Verdict: PayPal wins due to widespread access
Both brands offer an array of options in this category, however, PayPal is generally more accessible to customers all around the world and more well known.
What do users have to say about each brand?
Due to the competitive nature of the money transfers industry, it is worth taking note of what other users have to say about a brand before you pay for their services.
Cash App has been rated #1 in the Finance category by users on the App Store, stealing the first place spot from Venmo.
Overall, reviews left by more than 2 million Cash App users add up to 4.7 out of 5 stars. Feedback includes praise for their instant payments, user-friendly interface and convenient features such as bitcoin and stock trading.
Negative comments about poor customer service appear to be what is holding Cash App back from achieving 5 star status.
Similar criticism can be found over on the Google Play Store, where Cash App has been awarded a good rating of 4.2 out of 5 stars, but is let down by criticisms of poor customer service.
✅ Verdict: PayPal reigns victorious
PayPal nabs the top spot in the race for the best online reviews. This being said, the fact PayPal has far more positive online reviews is largely due to the fact PayPal has a global customer base.
What brand offers better ease of use, accessibility, transparency & security?
We will look carefully at each of these factors to determine which company offers the best overall experience for customers.
Accessibility: the company does not require customers to connect a bank account in order to register with Cash App, making it quick and easy for users to send and receive money using their balance alone
Ease of use: Cash App’s simple display and straightforward user interface makes it a simple app to navigate when sending peer-to-peer payments: whether you are splitting bills or divvying up your monthly share of the rent
Security: Cash App is not insured by the Federal Deposit Insurance Corp (FDIC) in the US which makes their banking features limited as funds are not covered by the same regulations as other competitors. When it comes to protecting and insuring personal data, however, Cash App uses state of the art encryption and fraud detection technology to ensure customer details are secure. Two-factor authentication is also used across the app
Transparency: Cash App is very clear about its core functions: sending money, receiving money, investing and acting as a digital wallet
✅ Verdict: Both are winners for different reasons
Cash App excels in terms of transparency and ease of use, but PayPal demonstrates the gold standard for digital security and worldwide accessibility. This means it’s a tie.
Additional features
A final look at any bonus features offered to Cash App and PayPal account holders.
Cash App users can buy, sell, send and receive stocks and Bitcoin: US customers only
Cash App offers discounts at popular coffee shops, restaurants and other merchants as part of their Cash Boosts scheme
Cash App customers can deposit paychecks and government payments into their online account
✅ Verdict: PayPal simply has more to offer
PayPal has been on the scene longer than Cash App and has fine-tuned their features to suit the needs of every potential client, private or corporate. In addition to this, PayPal is a widely accepted form of payment as well as being integrated with many of the world’s biggest online platforms.
Bottom line - which is better?
After taking a look at what’s under the hood, it is clear PayPal is the winner of this brand comparison due to the sheer diversity of its international payment services. The industry titan is undoubtedly more versatile in terms of payment options, transfer methods, international currencies and overall accessibility. This being said, the company does not offer the most competitive exchange rates or transfer fees, and has long been accused of inadequate transparency when it comes to customer support.
Cash App, on the other hand, is a useful peer-to-peer mobile app which offers a straightforward, no-frills service to customers based in the US or the UK. It is a great option for anyone who needs to make casual payments to other Cash App users.
See how other money transfer companies compare when they are pitted against each other, in our other comparison reviews.
