Square Cash App For Business: The Complete 2023 Guide To Setup & Fees
While Cash App is mostly known for personal transactions, you can use Cash App for business transactions by setting up a business account with a few simple clicks.
Cash App is Square’s popular peer-to-peer transaction application and lite Bitcoin trading platform. Businesses looking for a lightweight transaction option will be happy to know Cash App can also be legally used for business transactions with a few settings tweaks.
In this article, we’ll be looking at how to set up a Cash App business account, how to use Cash App for business vs. personal, and the strengths and limitations of the application.
Table of Contents
- Can You Use Cash App For Business?
- How To Make A Cash App Business Account
- What Is A Cash App Business Account?
- What Are The Fees For Using Cash App For Business?
- How To Set Up & Use Cash App For Business Transactions
- Can You Collect Cash App Payments Without A Business Account?
- Should You Use Cash App For Business?
- Common Questions About Cash App Business Accounts
Can You Use Cash App For Business?
While Cash App is mostly known for personal transactions, you can use Cash App for business transactions.
Using Cash App for business transactions requires you to create a business account. You’ll then be able to accept transactions through the application.
Note that it’s possible to accept Cash App as a payment method without a Cash App business profile if you are a Square customer using compatible hardware or software. More on that later.
Can Any Business Open A Cash App Business Account?
Unfortunately, not every business is a good candidate for Cash App. Like Square’s other services, Cash App has a list of prohibited businesses.
How To Make A Cash App Business Account
Creating a Cash App business account is pretty straightforward.
- Download Cash App and create a personal account.
- Within the app, tap the icon in the upper right corner that looks a bit like a person. This will bring up your account information.
- The top submenu should say “Personal.” Tap on that. You’ll find your personal details there. Scroll all the way to the bottom, and you should see the option to Change Account Type. Tap on that.
- If you’re in the right spot, you should see something like the screenshot above, which discloses the transaction fee. Tap on Change This Account.
- Accept the confirmation
- You’ll want to link a bank account to your Cash App if you haven’t already. You can do this by selecting Linked Banks and following the instructions within.
You’ll know for sure that your account has been switched over to business when you see this symbol near your account:
Note that you can verify your account before or after you convert your personal account to a business account.
The first time you try to exceed the limits of an unverified account, you’ll be prompted to verify your account. You’ll then be asked to submit personal information, including your full name and Social Security Number.
Reverting A Cash App Business Account To A Personal Account
Be warned: Switching your personal account over to a business account is a one-way trip, at least where the interface is concerned. There’s no way to revert your account within the app itself, but you can file a ticket with support to have your account reverted.
I wouldn’t make a habit of switching back and forth too often, however, as Square could easily decide to leave your account on Business if they think you’re up to something.
What Is A Cash App Business Account?
Simply put, a Cash App business account vs. a personal account allows merchants to make sales through Cash App while remaining within the good graces of the law and terms of service. A Cash App business account has the following characteristics:
- Unique payment links and QR codes can be used to initiate a transaction
- Can accept peer-to-peer (P2P) Cash App payments
- No limits on the amount of money you can receive
- Allows you to accept payments through Visa, Mastercard, American Express, and Discover networks
Cash App For Business VS Personal Accounts
For the most part, Cash App business and personal accounts work similarly. There are a couple of key differences, however:
- Receiving money with a Cash App business account has a transaction fee; a personal account does not.
- There’s no limit to the amount of money you can receive per month with a verified business account.
- Business accounts can take credit card payments through Cash App; personal accounts cannot take payments.
- Business accounts are not charged a fee for instantly depositing their balance to their linked debit card.
You can have a Cash App business account and a personal account simultaneously, but each account requires a different phone number.
What Are The Fees For Using Cash App For Business?
If you’re accustomed to peer-to-peer transaction apps being free, it may be a little disappointing to hear that Cash App for Business has transaction fees in addition to the optional fees personal accounts pay for expedited bank deposits.
Here are the fees for Cash App business accounts:
- 2.75% per transaction
Why Do Businesses Need To Pay To Use Cash App?
But wait, aren’t transactions free with a personal account?
Cash App for business is less about getting unique features than about being in compliance with your terms of service. More importantly, as of 2022, services such as Cash App are required to report personal transactions totaling more than $600 in commercial payments annually to the IRS.
How To Set Up & Use Cash App For Business Transactions
You don’t have to do anything special to get Cash App ready for business transactions.
Cash App works through payment links and QR codes, which means that you and other Cash App users can initiate transactions by having one party scan the other’s QR code. If you don’t want to hold up your phone for every customer, you can print out a code for them to scan instead and place it near your POS.
The good news is that your customers don’t need to have Cash App to be able to pay you.
You can generate a payment link (your $cashtag) that you can text, email, message, or embed in your website. This link will take them to a “Cash.me” page where they can either log into their Cash App or enter their name and email address along with their credit or debit card information.
Can You Collect Cash App Payments Without A Business Account?
Cash App used to live in its own little silo apart from the rest of the Square ecosystem, but that’s no longer the case. If you use Square as your payment processor, you may be able to accept Cash App payments without a Cash App business account. Cash App is enabled as a payment method by default when you’re using a compatible Square program. However, this feature can be toggled off if you’d prefer not to accept Cash App.
The following Square products can accept Cash App:
Should You Use Cash App For Business?
Cash App’s business applications are narrow but powerful.
For businesses that make infrequent and small transactions, Cash App is a wonderful convenience. You’ll be able to take Cash App and credit card transactions with minimal fuss and no hardware expenditures outside of the mobile device you’re already using. The flat 2.75% transaction fee recalls the old days of Square; with no flat markup, it’s cost-effective for very small transactions.
That said, Cash App is extremely limited. It offers the ability to take payments, and that’s about it. Cash App will send you a 1099-K form if you do over $20,000 in transactions in a calendar year (less if you’re based in Massachusetts, Vermont, Maryland, Washington D.C., or Illinois). Beyond that, you’re responsible for taxes and keeping track of transactions. Add in the limits for sending and cashing out money, and you have a tool that isn’t suitable for high-volume businesses.