Peer-to-peer payment apps have been changing the way we send and receive money. But the amount of apps makes it difficult to determine the best option for your unique money needs.
In addition to sending money, some of these apps have evolved into full-blown financial services platforms—with banking, investing, and more.
In partnership with Cash App, let’s take a closer look at the various kinds of peer-to-peer payment options so you can determine which is right for your situation. If you’re curious about getting started with Cash App, you can open an account and try it out >>
Cash App
Cash App started as a platform that facilitates peer-to-peer payment options. Since its inception, it has evolved into a financial services app. Like the other apps on this list, you can send and receive cash using a bank account, debit card, or credit card.
Your Cash App Spend account comes with a Cash Card, which is a Visa debit card. The card can be used anywhere Visa is accepted. If you want to get your paychecks sent through Cash App, you can receive direct deposits into this account.
Additionally, with Cash App, you can purchase stocks and Bitcoin through the platform. If you decide to invest in stocks, the fractional shares option gives you the ability to grow your portfolio at your own pace.
You can even prepare your taxes for free through the Cash App platform (with Cash App Taxes).
Transaction Details
Before you verify your identity, you can send and receive up to $1,000 within a 30-day period. After verifying your identity, you can send up to $2,500 per week.
When you send money via a credit card, there is a 3% transaction fee. You can avoid paying this fee if:
- You send cash via a debit card
- Receive money through Cash App
When you cash out, you’ll have a free option that takes a few business days. If you need the funds instantly, there is an instant debit card deposit option. But you’ll also incur a fee of 0.5% to 1.75%.
Pros
- Standard bank cashouts are free
- No fee for sending money using a debit card
- Ability to buy stocks and Bitcoin
- Banking services, complete with a Visa debit card
- Free tax preparation
Cons
- 3% fee to send money with a credit card
- Instant cashout fee of up to 1.75%
Get started with Cash App here >>
Venmo
Venmo, which is owned by PayPal, offers a social way to send peer-to-peer payments.
When you send money to someone, you have the option to add what its for and include emojis. The default mode in Venmo is to share your payments with your “friends” in the app. So they could see that you split the check for dinner. But you also have the option to keep this information private.
You have the option to have your paychecks sent directly to Venmo via direct deposit. If you are interested in purchasing cryptocurrencies, you can start building a crypto portfolio for as little as $1. Venmo is probably the closest competitor to Cash App today.
Transaction Details
Before you verify your identity, you can send up to $299.99 per week. After you verify your identity, you can send up to $60,000 per week on Venmo.
When sending money using a credit card, you’ll encounter a 3% fee. However, it’s free to send money to others when you use your Venmo balance, debit card, or bank account balance.
When you receive money, you have the option to withdraw it for free. But if you can’t wait up to three business days, there is a 1.75% fee to instantly transfer your funds.
Pros
- High sending limits
- Social element
- Free cashout option
Cons
- 3% fee to send money with a credit card
- Instant cashout fee of up to 1.75%
Zelle
Zelle is another tool to send money through many major banks. Zelle is most convenient if your bank offers this functionality. But you can download the app and enroll in this option with your Visa or Mastercard debit card.
The bank-to-bank element of Zelle is convenient. You might see your transfers get settled in as little as 10 minutes.
Transaction Details
If Zelle is offered through your bank or credit union, the financial institution will set your sending limit (and if it’s too low, you can ask them to raise it). For Zelle users that don’t have an attached financial institution, your weekly send limit is $500.
Zelle itself doesn’t charge any fees to send or receive money. But check with your financial institution to see if they’ve added any fees to use Zelle with your connected account. Unless you have free checking, you might be paying bank fees you can avoid.
Pros
- Zelle doesn’t charge any transaction fees
- Fast settlement into your bank account
- Offered by most major banks
Cons
- Not all financial institutions offer Zelle
- Relatively small payment limits
- You can only link one bank account to Zelle at a time
PayPal
PayPal might be the most recognizable name in the peer-to-peer payment world. Although it was one of the original options, it’s no longer the only way to send money between peers.
You can sign up for PayPal with just an email address and phone number. In order to pull cash out, you need to link your bank account.
Transaction Details
PayPal offers large sending limits. Some users can send up to $60,000 in a single transaction. But if you are new to PayPal, expect your limit to be $10,000 in a single transaction.
If sending money domestically from your PayPal balance or bank account, there is no fee. But if you are sending money domestically via a credit card, it costs 2.90% + $0.30. When sending money internationally, there is a 5% fee for all types of transactions.
You can withdraw money for free with a linked bank account but if you want your funds instantly, there is a 1.75% fee.
PayPal has also introduced cryptocurrencies to the platform, but still lacks the trading capacity for stocks or other investments.
Pros
- High sending limits
- Only need an email address and phone number to set up an account
- Can invest in crypto
Cons
- Fees are higher than other platforms for some transactions
- Instant cashout fee of up to 1.75%
Which Is Best For You?
When choosing between Cash App, Venmo, Zelle, and PayPal there are many factors at play. The only way to narrow down your options is to determine what you are really looking for in a payment app.
If you only want to send money between friends, then Venmo or Zelle might be the right fit. If you are looking for a more robust financial services app, then Cash App has more to offer.
Cash App has continued to build out a robust money app that can handle most of your money needs. Banking? Check. Investing? Check. Taxes? Check. If you’re already using your phone and doing banking, sending money, and checking stocks, it might make sense to do it all in one place.
Sarah Sharkey is a personal finance writer covering credit cards, mortgages and student loans. She has written for numerous finance publications, including MagnifyMoney, Business Insider and ChooseFI. Her blog, Adventurous Adulting, helps young adults get a handle on their finances.
Editor: Claire Tak Reviewed by: Robert Farrington