Cash App is basically a peer-peer payment platform developed and owned by Square Inc.
The app can be used to transfer money between individuals, pay for purchases, and withdraw funds from ATMs using the debit card (Cash Card) and also to buy and sell Bitcoin and invest in stocks.
Selecting the right service to buy and sell, deposit, and transfer your Bitcoin is one important feature that traders and investors look-out for.
For a beginner getting the right platform with a simple, clean, and beginner-friendly interface, with a less complicated system is essential,
While for an advanced trader or investor having a platform with high level of sophistication that provides advanced features to manage your trade will be crucial to your venture.
But one thing that all category of investors/traders look out for is the platform with the cheapest transaction fees,
So just like a one out there, I researched the topic and got some insights, therefore this post was written to help those also looking for such information and spread light on a possible solution using the biggest name in the fintech app space, (Cash App)
Let's dive in,
Cash App Bitcoin Fees Breakdown
Cash App doesn't explicitly state how much are the fees they charge for Bitcoin transactions,
While there is saying that " transparency build trust and brand acceptability, it seems that the guys at Square does not follow such school of thought and still get along just fine.
Here's what they state on their self-service portal.
Cash App charges two kinds of fees for bitcoin transactions: a service fee for each transaction and, depending on market activity, an additional fee determined by price volatility across U.S. exchanges...These fees will be listed on the trade confirmation before you complete a transaction. Source: Cash App
They also state
Bitcoin purchases and sales made through Cash App are carried out at a mid-market rate that is determined by exchange prices.
Source: Cash App
From this, one can only conclude that they do not state their fees and that would be correct.
But users of the platform Bitcoin service, that have been using it for a while seem to have an interesting observation. They have noticed that the higher the transaction amount, somewhat lower the fees.
On the low side of the fee spectrum, the fees have been observed to be around 1.5% to 1.7% and on the high side, it's around 2.7%. But generally there higher the buying or selling amount the lower the fees.
Ideally, this may one of the best platform for low - average (beginner to intermediate) traders/investors that would also like to have some level of independence because
- It's also a non-custodial platform (i.e Your bitcoin asset is at your disposal to transfer to other external wallets)
- Competitive fees.
To some degree, this is maybe the best versatile platform for bitcoin trading. But if you're a trader/investor that trades especially large volume/amount or do multi-crypto trading this may not be the best platform for your venture.
Here are some reasons
1. Obscure fee structure: with their unclear fee structure, this may affect trade planning and execution due to fewer data available to make informed decisions.
This may not be the best route to take when compared with other options out there, that provides far obvious fee structure, with these data, you can better plan and manage your bitcoin trades.
2. Limits: While Cash App has a fairly robust Bitcoin limit, it's quite frank to say that their deposit and withdrawal limit maybe become an issue if you do high volume trades.
For deposits, from the information on their site, you can deposit up to $10,000 worth of Bitcoin in a 7-days.
For withdrawals, you can withdraw $2,000 worth of Bitcoin in 24 hours, and $5,000 in 7 days period. For purchases, some sources state that the limit is capped at $100,000 per week
3. Powerful analytics: Compared to other option available, this would not be best platform to go with if you're a data/stats driven trader/investor.
Best tool for the job
It's not all bad for up Cash App with its fee structure, even with the lack of clarity it still cheaper in terms of fees compared to some of its competitors such as Coinbase, at least the standard Coinbase and not the Pro version of the App.
But overall Cash App is a great way to get started trading Bitcoin because of its comparable standard fees,
The robust limit for buying, selling, withdrawal, and deposits, which should be enough for anyone trading a couple thousands or hundreds of dollars a week
Combined with another great feature, this is the ability to be a Non-custodial platform,
Where you can transfer your Bitcoin to an external wallet, compared to some of its direct competitors like PayPal and Robinhood.
Just as different tools are for different tasks, the same applies to Bitcoin platforms, as there is no platform there that fits all traders/investor's persona and marketing requirements.
Therefore, you have to select from the host of the different platform out there, the one that best fit persona and trading requirement.
Cash App competitors
Here are some of its competitors with their bitcoin fees to consider
Fees: (Standard) $0.9 for purchases below $10, and 1.44% for $200 above.
Coinbase was started back in 2012 and has been one of the oldest platforms for bitcoin trading out there.
Their platform has two free versions
- Coinbase (standard)
- Coinbase Pro
The fee structure of Coinbase (standard) is quite Clear,
For purchases under $10 they charge a fee of $0.99 and 1.44% of the dollar amount for purchases above $200, using debit or credit card will incur a fee of 3.99% of the dollar amount used for purchases.
For the Pro version, the fees were tone down a bit, as it was targeted towards the advance and large budget traders/investors.
Note, there is an additional 0.5% fee to be paid for purchases and sales.
Overall Coinbase (standard) is geared towards newbies and less involved individuals in the crypto world,
It is also important to note that Coinbase (standard) is a custodial exchange platform. i.e Your bitcoin asset cannot be deposited or transferred to an external wallet.
The company is the sole host of your asset bought through its platform.
But the Pro version is not a custodial exchange platform.
Fees: Not clearly defined, but has a comparable competitive fee structure
Started by two Stanford College graduates in 2013, Robinhood has been known for its zero-trading fee.
Traditionally, the platform is an investing app, but in 2018, they launched the Bitcoin service to users, with zero-trading fees and zero balance requirement features.
It was geared towards newbies and young average to low budget individuals.
While ideally there should be no trading fees from using the app, but in today's crypto world, there is hardly anything freemium.
These fees are incurred because the platform uses other trading firms, as it only a broker,
But overall for low to average transactions, Robinhood is still cheaper than Coinbase (both versions), also just like the standard Coinbase, Robinhood is a custodial platform (i.e you cannot transfer your crypto asset to an external wallet.
Fees: $0.5 for purchases below $25, 2.3% for $25 - $100 and 1.5% for $1000 +
The peer-peer platform and financial giant needs no further introduction, but recently PayPal dived into the world of crypto trading and is of the newest players in the game.
Their fee structure is clearly laid-out and available on their site, a simple Google search will get you there.
For purchase below $25, PayPal charge a fee of $0.5, 2.3% for $25 - $100 and 1.5% for $1000 and above.
But just others on this list, it's also a custodial exchange platform.
Fees: $0.1 of the trading amount
Binance is a platform created and designed to be accessible to most individuals without the hassle of identification, founded in 2017, it has become one of the big players in the crypto exchange scene.
Binance is geared towards advanced and large budget investors/traders while having one of the most competitive fees in the market, which on average is set at 0.1%.
It's also geared towards individuals that are involved/interested in multi-crypto trading,
As it supports around 600 different trade pairs involving crypto assets and a wide range of possible audiences.
Binance is the only exchange platform on this list that is not custodial, meaning that your crypto assets are at your disposal, you can do just anything you want!
Features to look out for when choosing a Bitcoin platform
1. Limits: The platform should provide trading limits that are tailored to your needs and requirements,
If you're just starting, you don't really need pro-platforms with complex systems, and over a $100,000 buying limit as you may not be trading that high.
What you rather need is to have a system that has great UX and is beginner-friendly, while still having limits that are in your trading range.
2. Fees: It all boils down to money, a super large percentage of the people in this Industry are out to make money,
Adapt your requirements to a platform that provides the best bang for your buck (lowest fees), while being within your trading limit.
3. Reputation: No one likes to get ripped-off of their money, it has been reported that some companies and individuals, scam users of their platform, usually parting away with their money or bitcoin.
Therefore, do your own due diligence and research the platform, and use common sense, before committing your money.
4. Overall usability Before you commit your money to a platform,
At least do some research to get an idea of how to system works, its terms & condition and privacy policy, sign up process, how long do they take to process transactions, and overall operation.
So as to make an informed decision and not run into issues later in the future during the course of utilizing the platform.
Now, do I mean you should use all criteria here to evaluate a platform? Of course no,
You can select from the option provided the ones that are most important to you and screen your prospects from there.
Overall Cash App is a great system to perform bitcoin transactions, pass funds around while using only but your mobile phone,
Its fits a large portion of trader and investors out there and would be a great platform to get into, but as always do your research before jumping in.
Now it's over to you, the ball is in your court, play well!.
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