how does cash app make money

Cash App Business Model: How Does Cash App Make Money In 2023?

It’s hard to think about modern life without instantaneous, wireless money transfers. Today, there are tons of apps available that have made the entire payment and money transfer process much simpler.

And we can’t forget Cash App when we discuss mobile payment services!

But how do businesses like Cash App manage to operate such high-end businesses with such minimal or no fees? Let’s explore the Cash App’s business model in greater detail to see how it actually makes money!

How Does Cash App Make Money?

Cash App makes money mainly through Merchant Fees, Bitcoin Fees, Interchange & Withdrawal Fees, Instant Deposit & Paycheck Fees, and Referral Fees!

Let’s delve into each of these in more detail!

Merchant Fees

This accounts for the charges imposed upon a merchant for using Cash App as a gateway for accepting payment from customers. The widespread popularity of the Cash App has made the company earn the most significant part of its revenue through this method. 

Merchants are compelled to provide customers the option to pay through the Cash App. The normal fee is 2.5% on every transaction which increases to 2.75% if the payment is made through a credit card.

Known as ‘Cash for Business’ in the app’s language, this fee is harsher than that of other services like Mastercard and Visa.

Payment For Order Flow

Unlike Bitcoin trading, investment in stocks is completely free through the Cash App. However, there is a hidden profit made by the company through stock trading referred to as ‘Payment of Order Flow’. 

After an order is placed, Cash App transfers the deal to an entity called a market maker who pays a commission to Cash App for bringing that deal. The company clearly states this in its legal documentation on its website as a portion of the revenue earned from the Carrying Broker’s revenue who directs the orders to the particular market centers for execution.

Bitcoin Fees

With the advent of Bitcoin trading, not only have the commoners found an additional way to earn money but companies like Cash App are minting money through it as well. Cash App levies an upfront charge of 1.76%-3% depending on the value of the purchase of Bitcoin, In addition to the transaction fees, the company earns through the fluctuations in the Bitcoin prices.

The rising popularity of Bitcoin as a mode of digital currency has done wonders for the app. Recently Bitcoin became the leading source of revenue for the company. According to reports, in 2021, 81% of the company’s revenue was generated through Bitcoin trades.

Interchange & Withdrawal Fees

This is the method through which the company earns money from the common public. All Cash Card holders pay a certain amount as transaction fees while paying at merchant counters through the Cash Card. 

These fees range from 1%-3% of the total amount. Apart from the purchases, cash withdrawals from ATMs also generate income for the company. A user pays $2 for every Cash Card transaction at an ATM.

Cash Card is the first choice of users for purchasing any commodity resulting in it being a major revenue generator. The company crossed over 13 million Cash Card users and claims that the service generates one-third of its total revenue.

Instant Deposit & Paycheck Fees

In case a business owner or an individual opts for an instant deposit of funds in his bank account through the Cash App, the company charges fees ranging from 0.5% – 1.75% depending on the amount to be transferred. The usual deposit duration is of 3 days but via this feature, users can get the money instantly.

Cash App also charges the users who decide to receive their paychecks via the app. This fee can be 0%-5% depending on the amount. The company promotes the paycheck feature by giving users special offers on ATM withdrawals.

Referral Fees

Cash App has more than 100 million downloads and 44 million monthly active users. The app is one of the most preferred payment services in the USA and the UK. With such galloping growth and massive outreach among the people, it is the eye-catcher of new brands and established ones even for advertising their products on the app.

The service is termed as Cash Boost and lures customers by providing them with exciting offers at the partner brands’ outlets when they transact through the Cash App.

Revenue, Funding, and Valuation

Over the course of the past two years, Cash App’s revenue has shown significant growth, and reached a staggering $12.3 billion in 2021. According to reports, the company’s monthly user base has grown to 47.8 million from 44 million in 2021. The analysis of the 2021 revenue figure tells us that the company earned $10 billion from Bitcoin sales (81% of total revenue) – making it the most profitable asset for the company.

Source: Business Of Apps

Cash App is a subsidiary of the American tech giant Block Inc. owned by Jack Dorsey. Block’s top 5 shareholders include Jack Dorsey, Morgan Stanley, BlackRock, VanGuard Group, and T. Rowe Price. These investors account for 34% of the company’s total value. Cash App has not undergone any official funding rounds to date.

Cash App is valued at more than $40 billion currently and accounts for more than 66% of its parent Block’s net value.

A Brief History of Cash App

Jack Dorsey the founder of Twitter launched Block in 2009 along with Jim McKelvey. The app was launched in 2013 by Block, formerly known as Square, with the name Square Cash. At that time services like PayPal, Venmo, and Google Pay were already available in the market.

The app currently works in the USA and the UK. Initially, the app was launched as a payment service and later included other features as per the market standards.

In 2018 and 2019, the company launched Bitcoin trading and stock trading respectively. In 2020, the company did its maiden acquisition by purchasing Credit Karma Tax for $50 million.

On the revenue front, the company generated $0.4 billion in 2018 which increased to $1.3 billion in 2019, $5.9 billion in 2020, and doubled itself to $12.3 billion in 2021. The COVID lockdowns resulted in a boost in online purchases which led to a huge growth in the company’s revenue.

Competitors of Cash App

The market of online payment facilitators is huge and deeply penetrated by tech giants like Apple, Google, and PayPal. Cash App faces tough competition from each of these services and hence, provides attractive discounts and offers to its customers, in order to sustain itself in the market.


The leading company in the payments sector globally having an impact of more than 400 million users across 200+ countries. It is the most trusted and used payment service for B2B transactions. It is the oldest online transaction services company that was founded in 1998. It had a net revenue of $25 billion in 2021 and has a valuation of $78 billion. PayPal, being the strongest player in the market, is a benchmark for companies like Cash App.


Venmo is a digital payments service that started earlier than Cash App. It was one of the first-of-its-kind payment applications in the USA but failed to capitalize on that aspect. Venmo has a user base of 70 million+ and is widely popular in the USA. Venmo was acquired by PayPal in 2013. The company recorded a revenue of $850 million in 2021.

Google Pay

Google Pay, known as Google Wallet till 2018, was launched in India, America, and Singapore. The app has shown rapid growth and touched $14 billion in revenue in the past year. Being a Google subsidiary, the app has been using the finest technology. The previous version of the app Google Wallet enabled users to send payments through email attachments.

Apple Pay

Launched in 2014, the company has grown to over 200 million user base. Like other apple services, the app is only available for iPhone users. The app is used globally and ranks second in terms of users among its competitors. Apple Pay makes more than $5 billion in revenue and is a major contributor to Apple’s overall revenue.


Q1. Does Cash App Make A Profit?

Since 2018, Cash App has proven a persistent ability to turn a profit. The profit for the company was $2 billion in 2021, compared to $1 billion in 2020, $0.45 billion in 2019, and $0.19 billion in 2018. The company has become highly popular which has made it earn such heavy profit even after operating in the USA and the UK only.

Q2. Is Cash App Safe To Use?

According to Cash App, the company uses cutting-edge encryption and fraud detection technology. The technology is similar to that used in millions of Square POS transactions. The app is completely safe to use and provides regular messages for awareness against scammers. The company is PCI- Data Security Standard (PCI-DSS) Level 1 compliant.

Q3. Who Can Use Cash App?

In 2021, the company lifted its age restriction of 18 yrs which permitted users up to the age of 13 yrs to operate the app. However, users aged 13-17 yrs can not use the Bitcoin and Stock investment features. Also, if required one can also turn on/off the age limit features directly from the app.

Q4. Is Cash App Free?

Most services in the Cash App are free for individual users like withdrawal of money within the standard duration is free and sending money to a friend. However, services like immediate cash withdrawal and Cash Card transactions are paid. There are different charges a user needs to pay for using a Cash Card at merchant stores and at ATMs.

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