Not long ago you had to carry cash to most of the places. This is because that was the only way you could pay if you ever bought something. There were even places where you could swipe your credit card to pay the bill. But this was not the case all the time. Because not every place would have the facility to swipe your card. So carrying a little bit of cash was absolutely necessary. This is only one of the problems when you want to exchange money for goods or services. But if you wanted to transfer the money to someone else’s account it was a different deal altogether. Most people only know one way to do it, that is going to their banks and deposit the money into other bank accounts. This is a very simple process but it consumes a lot of time.
Just imagine how much time you had to spend just to go to a bank wait and deposit the money. You would be wasting your working hours transferring the money. However, this was not the only way to transfer money as you could even do it through net banking. It is way easier to transfer money through net banking than going to a bank. But you need to have a good internet connection and a computer to do so as it is very hard to do it through your mobile. However, you must have noticed that in the past few years there have been various apps that made the whole process of money transfer so easy. All you have to do is install the app, link your bank account and phone number so that you can send money to others. This article is about one such app called Cash App.
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What is Cash App and how does it work?
Cash App is a peer-to-peer payment application that is developed by the company Square Inc. Square Inc is an American based company that deals with merchant aggregator services and financial services. Cash App was introduced for the first time in the year 2013. It was in 2015 the application was introduced for the businesses. Back then it was known as Square Cash. After that, the name was changed to Cash App. As mentioned earlier this app allows individuals to transfer money to one another. Cash App was not the first one of its kind as peer-to-peer payment services like Google Pay, Apple Pay and Venom were already present in the market. This was the step taken by Square Inc to compete with other similar services. By the looks of it Square Inc has been successful in achieving what they wanted. Currently, the Cash App has more than 30 million users.
One of the main reasons for the success of peer-to-peer payment services is because of how easy they are to use. All you need is a smartphone if you want to use these services. You can simply take care of all the stuff related to your money using the Cash App. There is almost no task related to money that you cannot do using this application. You can pay bills and transfer money to your family and friends. Not only that but you can also use this application to buy goods and pay for other services. But there is more to the Cash App than most people know about. Most of the apps that are similar to the Cash App only deal with paying bills, sending and receiving money. But the Cash App can do much more than that. You can even purchase Bitcoin and invest in using this application.
Business model of Cash App
For those of you who don’t know the Cash App is free for people to download and use. But it does depend on its customers to earn money. There are few sets of people who are really important for Cash App to make money. Cash helps all of these people to make their transactions easier who in turn helps it in making money. Let’s look at the types of customers the Cash App has.
Consumers
These are normal everyday people who use the app to do payments. These are the most important section of their customer base as there is no point for businesses to use the Cash App if they don’t have people who pay through the app. The Cash App has been very successful in reaching out to customers. One of the main reasons the customers use it is because of its simplicity. Apart from that, the Cash App has more features that the customers could use. Above all, it eliminates the need of carrying cash almost completely.
Businesses
Businesses are the most important customer base when you look at it in terms of revenue. If the business accepts payments through the Cash App it becomes easier for them to deal with money. They don’t have to worry about dealing with the cash. Businesses don’t have to look for change to give them back to customers. The transactions are completely cashless so it eliminates the chances of the money getting stolen completely. Above it has the complete payment history which is also great to keep an account of the money flowing in.
How does the Cash App earn money?
As you already know cash is an application that is used to transfer money from one Cash account to another Cash account. The users can even pay their bills using the Cash card which is a Visa card that is linked to their Cash account. So it is not hard to know how it makes money. It charges businesses and individuals for making payments through its application. Here are the following ways in which the Cash App makes money.
Businesses
As mentioned earlier businesses are the major source of revenue for this application as there are lots of payments happening on a daily basis. If you are a business owner who uses the Cash App to receive payments then you have to pay a small percentage of every payment to them that takes place through their application. It charges 2.75% on every transaction. The customer can pay using the Cash App or they can pay using the Cash card but the percentage of commission is still the same.
Transaction to other accounts
This fee applies to everyone whether it is a business or an individual. You might have observed that there is a delay in receiving the deposited money. One has to wait for some time if they want to receive money that is deposited into their bank account. But The Cash App allows you to make expedite transfers. You don’t have to wait to see if the money that you sent is deposited into someone’s bank account. The money will be transferred tk their account as soon as you send it. But the Cash App charges some fee to do this. You have to pay 1.5% of the money you are sending to the Cash App if you want to expedite transfers.
Exchanging Bitcoin
In 2017 the Cash App has given its users the ability to buy or sell Bitcoin through its platform. Two years after introducing this feature the Cash App started charging fees for transactions of cryptocurrency. It charges nearly 1.76% on Bitcoin transactions. Not only that but it also profits through this commission. This is because the prices of the cryptocurrencies are volatile. So the Cash App may acquire the Bitcoin for one price but sell it for more than the original price after some time.
Conclusion
This is the business model of the Cash App. All the other similar applications have business models that are identical to this. You can check out other business models like the business model of Fortnite on Zeen.
