.svg)
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
PayPal offers a range of diverse services which means the fee structure is also diverse. Transfer fees are determined by the country in which you are registered with PayPal and while there is no fee to open an account and transfer funds to family or friends using a PayPal balance or connected bank account, the company does charge fees for services such as credit card transfer and currency conversion.
The following fees apply to money transfers:
A fee of 2.9% + £0.30 for apply to all debit and credit card payments
A fee of 5% is added to international transfers
A fee of 0.5% will apply to cross-border transfers to European countries listed here
A fee of 2% will apply to cross-border transfers to the USA, Canada and other countries listed here
✅ 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.
An exchange rate spread applies to most PayPal transfers and the mark-up ranges from 3 to 5%. Disappointingly, the total cost for an international money transfer will not be displayed until the final stage of the process. Customers can use the PayPal Currency calculator, found on the website or in-app, to view current exchange rates.
✅ 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.
PayPal allows customers to send money to more than 200 countries, in 25 of the most popular global currencies. For the full list of PayPal supported countries, click here.
✅ 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
Much like their fee structure, PayPal’s transfer speeds vary greatly.
The quickest transfer method is for sending funds from one PayPal account to another, using the same currency.
The slowest transfer speed is applied to PayPal payments which require funds to be withdrawn from a linked bank account, then converted, which can take between 3 – 5 business days.
Generally, international money transfers with PayPal take 1 business day to arrive with a recipient.
✅ 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
The following transfer options are available to PayPal customers:
Sending to friends or family: free of charge service for sending gifts to known contacts but is not the more cost effective option for converting currency and transferring funds overseas
Paying for goods or services: this is covered by PayPal Purchase Protection which means recipients can receive funds either by bank transfer or via their PayPal account; the latter is faster.
PayPal transfers can be settled via:
Bank transfer
Credit card
Debit card
PayPal 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.
The PayPal app has been rated over 3 million times by iOS and Android users. It has been awarded 4.2 out of 5 on the Google Play Store and 4.8 on the App Store: this levels out to an average rating of 4.5 out of 5.
Positive feedback praises the app’s fast and easy mobile transfers, high quality data encryption and convenient two-factor authentication, as well as praise for PayPal’s Buyer and Seller Protection programme.
Negative comments relate to technical issues, dissatisfaction with the user interface and high profit margins applied to foreign currency transfers. Further to this, some users report delays to the release of funds sent from other PayPal accounts and some find it easier to use the website than the mobile application.
✅ 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
Accessibility: PayPal states their commitment to “making our website’s content accessible and user-friendly for everyone” and this is backed up by the wide range of countries (over 200), currencies (25) and languages (17) available.
Ease of use: PayPal’s app has been awarded excellent ratings online and due to the familiarity of the brand, their online platforms have been designed to be quick and straightforward for all demographics.
Security: To keep accounts secure, PayPal uses advanced encryption technology to protect every transaction. Touch ID, PIN codes and security questions are used to protect the mobile app, and although safe, there have been many complaints of account restrictions during login attempts
Transparency: PayPal’s lack of transparency is a contentious topic. Users have complained about unexplained account restrictions and closures in recent years. In June 2021 a group of digital rights advocates penned an open letter to PayPal demanding “more transparency and accountability” particularly in relation to the timely and meaningful appeals process and notice period for account holders
✅ 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
PayPal Payout: Mass international payments for business
PayPal Credit: Buy now and pay later using monthly instalments
PayPal Cash Card: Get a free Mastercard® debit card to use for contactless in-store payments or online purchases everywhere PayPal Direct Deposit: Deposit paychecks or government payments online into your PayPal account
PayPal Cash: Deposit cash over the counter at over 100,000 locations across the United States
✅ 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.
More PayPal guides
.jpg)
