Cash App is the world’s most popular peer-to-peer payment processor used by over 70 million people every year.
The app has revolutionized the simplicity of not only transferring money between friends and family digitally but has opened up a world of possibility when it comes to business transactions.
With a business Cash App account, anyone can set up their own payment portal to sell services or goods without the hassle of setting up legacy payment processing services or routing cash through the banking system.
By allowing people to set up payment links to take payments directly, from any source or platform, the horizon of doing business in the digital world is expanding faster than the old models of business can keep up.
Whether you are using Cash App personally or setting up your own digital business in the new age of financial tech, Cash App provides a reliable and simple experience.
But what are the features of each account type, and can you have both at the same time? Continue reading to find out, and see which account is right for you.
Cash app Personal vs Business account – Comparison
I’ve been using both accounts and have found them to be suitable for their designed purpose.
A personal account is excellent for sending money to family, friends, and paying for some types of items, as long as you aren’t too bothered about how long the transaction takes. The business account is a great way to get some cash from your services when you are first starting out as a small business.
It’s very easy to set up in a matter of minutes and you can start taking payments immediately. The fees are also not much different compared to normal credit card retailer fees.
There are, however, a few caveats when it comes to deciding which to use and why. The fees and service structure of each account type are very different, and the business account isn’t really suitable for personal use and vice versa.
Key differences between personal and Cash app for Business
The key difference between the two is that like most Business accounts, Cash app has a much higher limit when it comes to payments. A Personal Cash app has an initial limit of sending £250 ($250) and receiving £500, which can be restrictive.
The main complication of Cash App is you can only have one Cash App account per phone number, since that’s the main way it’s linked to your Cash Tag.
That means if you have a personal account, you can’t also have a business account on the same number. This is a fairly major drawback, but is one of the only downsides of using the app.
You can solve this by having a second phone, or sim-card with a different number on your phone, one for your personal and one for your business account, but this is a bit of a side-fix.
Ideally, if you are running a business, but still want a personal Cash Tag for your own use, it’s probably worth getting a second phone for business. You might as well since business expenses are tax deductible and help separate accounting expenses anyway.
The payment link
To help you receive payments, a Cash App business account will provide you with a permanent payment link where you can receive money from customers.
Not only that, but people without the app can make payments through the link as well. You can put the link anywhere, whether it’s on a website, or an email, or on a billboard if you like.
This can really help to grow your business reach and make it easy for customers to pay you without having to go through difficult payment processors or require PayPal or other app information. Anything that can make getting paid by your customers easier is always a great aspect for your business.
Unfortunately, this is only possible with a Cash App business account and on a personal account you are unable to generate links or get paid in this way. People will need to know your number, email, or Cash Tag to send you money.
Cash app Business account: Receive unlimited money, at a price
With a Cash App business account, you are able to receive an unlimited amount of money for your business activities, which is ideal since you don’t want arbitrary caps on your trading.
However, you will pay for it. Each transaction received has a 2.75% transaction fee, which is on the high end for transaction costs. Most card companies charge 2-3% per transaction, so you aren’t losing out on too much since you are still getting your money, just paying Cash App instead of a card company.
Using a personal account, you not only have limits on the amount of money you can receive, but also on what you can send. These will depend on your account balance and how much information you’ve given, such as name, address, and social security number.
Basically, the more information you give, the more accurately Cash App can guess your ability to transfer money. Cash app Business accounts
Non-Cash app users can look at using another payment gateway like Skrill, PayPal or one of these solid alternatives to PayPal.
Are there fees for the personal account?
Most cash app services are free to use on a personal account, but there are a few specific types of transactions that will cost you money.
If you aren’t too bothered about how long transactions take, then you can get away with never having to pay anything to Cash App to use their service.
However, if you use their instant transfer and withdrawal services, they will charge 1.5% on top of the amount transferred. The standard time is 1-3 business days for a transfer, so if you can wait that long, you can easily avoid this fee completely.
If you try to make transfers on Cash App from a credit card rather than a debit card or checking balance, you will have to pay a 3% fee on top of your transfer.
This is the standard credit card fee that you would have to pay anyway if making a cash transfer. I would personally advise not doing this unless absolutely necessary.
Are personal and business accounts safe to use?
Cash App is amazingly safe to use, whether you have a personal or business account. The app uses bank-grade encryption to protect your data and money.
Regardless of whether you are using a public Wi-Fi spot, your transactional information will be safe as you aren’t actually entering any compromising information.
The app also has fraud detection built into its servers, allowing Cash App to detect unusual transactions or activity and take action to deactivate an account until the account holder can confirm security details and regain control.
It’s great to see this available as this is standard with any form of banking or credit service, so naturally having it available on Cash App helps provide peace of mind.
How to switch between personal and business
If you have a personal account and want to switch it to a business one, or vice versa, there is a fairly simple way to do it. This works both ways.
- Open Cash App.
- Tap on your profile icon on the top right.
- Select the personal tab.
- Near the bottom, tap “Change Account Type.” This will say from “personal to business,” or “business to personal.”
- Enter your PIN to confirm the change.
This is a relatively simple and straightforward process, but please make sure you know the risks when doing this, especially if you have a large business account.
For tax purposes, this will greatly complicate your finances, and mixing personal and business expenses/income is a big no-no in the eyes of HMRC.
It won’t matter as much if you are dealing with small money, but if you are into the thousands, you might want to keep your account business related.
Having a business account will streamline the tax declaration process by supplying you with a tax assessment form with their recorded transfers included, minus fess.
This can save you hours or days of manually working out income and expenses for your business and is one of the better perks of running your business through a Cash App business account.
Whether you use the Cash App business account or the personal account, you won’t be let down by the quality of the service and ease of use.
Whether receiving or sending money, Cash App really lives up to its name as the prime cash transfer app, simplifying the process of giving people money and paying for things in a non-hassle way.
I don’t think it’s a case of using one or the other based on preference, as if you have a business, you will definitely want to make use of Cash App’s Business account because the benefits and ease of exchange are just too good.
There is definitely the downside of not being able to use a personal account with the same phone number, but my recommendation would be to have a second sim or phone if you have a business and not to mix business and private money.
You could use a business account if you really have to in place of your personal account, but you will be losing 2.75% of every transfer you make, whereas a personal account would be free.