How To Develop A Mobile Payment Service Like A Cash App?

Every day thousands of new apps are coming into the market, however only a few experience the success they aim to. Thus, it is always a great idea to make an entry into the app market with the kind of apps that are booming at that given moment. For instance, lately, the apps for the financial sector have been quite a hit and people are embracing this concept of the app allowing them to easily pay bills, transfer money, invest in bitcoins, and much more. And this trend has been all the more fruitful for the Cash app that has garnered more attention. 

Among the top finance apps, the Cash app serves as an ideal tool for the people constantly involved in purchasing shares, selling shares, making bitcoin transactions, and more. Such is the popularity of the Cash app that it made a profit of $1230 million in the year 2020. Hence it is pretty clear that if you can looking to jump into the app business, then making a Cash-like app can be a great move.

So, let’s explore more about the Cash App and how you can create one for your business.

What Is Cash App And How Does The Cash App works?

This peer-to-peer money transfer service is created by Square Inc. enabling users to easily send and receive money. This service helps its users send their share of utilities to their roommates, split the trip cost, pay back their friends for lunch, or any of the money-sending tasks is made easy with the other users using the Cash app. 

Square, Inc. (SQ) was founded in 2009 by entrepreneurs Jack Dorsey and Jim McKelvey to realize their dream of developing technology capable of combining merchant services and mobile payments into a single, simple-to-use service. Square is now used by millions of small businesses to accept credit card payments, track sales and inventory, and obtain financing.

Cash App, a free mobile application that allows users to transfer and receive money, and Square Point-of-Sale, a free program that allows merchants to handle payments through smartphones, are two of Square’s products.

A cash app is much like a bank account that gives a debit card to its users, also known as a Cash Card, enabling them to initiate purchases using funds in the Cash app account. This app also enables its users to invest money in stocks, and purchase and sell bitcoins. 

How Does Cash App Work?

To understand the working of Cash App, it works just like any other money transferring app however it comes with a few extra functionalities. To load money on the app, simply tap the banking tab in the app and input the amount of cash users wants to add from their linked bank account. In order to send & receive money using Cash App, a user first needs to have an external bank account so it is easy to add money on the Cash app account and also have a platform where they can withdraw their Cash App funds. 

Next, it is time to install the Cash app on their phones, and then it’s time for registration, where a user account is created and the Cash app is linked to a minimum of one bank account. This bank account can be used to send money to the other Cash app users and even to transfer money from the Cash app account into the user bank account. The process is similar to other services like PayPal and Venmo, which enables its users to link a bank account to send money and also hold received funds (if any) in the app until they are ready to be withdrawn. 

In order to send a payment, the user is required to open Cash App, enter the amount they’d like to send, then tap “Pay”. Next, enter a phone number, email address, or another user’s username in the Fintech app and enter for what reason the payment is being made, and then tap “Pay”. And the payment is made.

To view “received payment details”, tap the “Activity” button and the money deposited in the Cash app account will reflect on the “My Cash” button, which constantly runs the total deposited funds. A form can also be filled in to get the paycheck deposited directly into the Cash app account. 

Key Statistics Of Cash App

• In 2020, Cash App made $5.9 billion in revenue, a 353 percent rise year on year, mostly from Bitcoin trading.
• This growth in Bitcoin trading is also responsible for Cash App’s 169 percent year-on-year increase in net profit.
• Cash App has 36 million monthly active users and has been downloaded over 100 million times.
• Seven million customers have the Cash App debit card, which allows them to withdraw funds from their Cash App balance.

Cash App Overview

Cash App Revenue

Cash App Profit

Cash App Bitcoin Revenue

Cash App Users

Cash App Card Owners

Cash App Annual Revenue Per User

Square vs Competitors: Payment Volume

Why Cash App Is So Popular Among Payment App Users? 

Cash App offers great convenience to its users and this is a major reason behind its popularity, however, that is not the only thing that attracts people to this app. Here we explain why the app is popular among its clan:

1. It’s Free For Basic Services

The app charges no fees to offer basic services like sending or receiving money, inactivity fees, or any fees for foreign transactions. This makes the app quite a hit among its users. 

2. Offers Optional Free Debit Card

This app has “Cash Card” functionality enabling its users to carry transactions and withdraw money they have in the Cash App account. The app offers the option to its users to get a free debit card that is issued by Sutton Bank. This is some facility that is only offered by Cash App and this card is not connected to a personal bank account or another debit card to manage your personal finance. 

When a direct deposit is set up, the app offers free ATM withdrawals: In other cases, the fee of $2 is charged to use an ATM with a Cash Card. 

3. Save Money With “Cash Boosts”

Users using Cash Card can select a particular boost on their account enabling them to save money upon their purchase with a specific vendor, like getting a discount coupon on purchase with DoorDash. At a time only one boost can be active, however, the users can choose to swap boosts as many times as they desire. 

4. Receive Cash Bonus For Referrals

When the app users send a referral code to their friends and the friends signup for the Cash App using that link, then the users receive a cash bonus of $5 on each friend signing up. 

5. Allows Users To Invest

The app enables its users to purchase stocks in selected companies with the amount they desire to invest, whether it is little or a lot of money. They can purchase the stocks with funds in their Cash App account, and in case the app lacks the required funds, then the remaining amount can be taken from the user’s linked bank account. 

6. The App Is Compatible With Bitcoin

The Cash App users are able to buy as well as sell bitcoin, but the app charges two kinds of fees for that, i.e., first is service fees for each transaction carried, and second is as per the market activity an additional fee is determined by the price volatility across the U.S. exchanges. 

The Popular Business Model For P2P Mobile App

Here we have mentioned the most common business models that work best for the P2P mobile apps, they are:

1. Standalone Financial Services

This popular business model is used by a number of P2P payment apps, such as Airfox, M-Pesa, Alipay, Square Cash, Venmo, PayPal, and many more. This model allows both online and in-person P2P/C2B payment, either with or without terminating accounts and Credit/Debit Cards. 

2. Mobile OS Functions

This model is mostly used by the brand like Samsung Pay, Apple Pay, Android Pay, and many more. The model only allows the financiers to make money transfers inside their product ecosystem. Also, this model consists of card tokenization, as well as device-based thumbprint authentication for better protection and comfortable usage.

3. Bank-Centric Functions

There are some banks using peer-to-peer payment app/devices to the consumers and assuring the traders that they have expected POS (point-of-sale) acceptance ability. This model is useful to instantly pick from and deposit into bank accounts instead of a deposited currency account. A few examples of apps using this model are clearXchange, PopMoney, Zelle, and Dwolla. 

4. Social/Messaging/Web Functions

This model is useful to integrate payment systems into social media platforms. It was found by the social media payment systems that the users to more likely to make frequent transfers to people they are in regular contact with. The model enables the users to transfer cash easily from anywhere using their social media. Popular platforms using this model are G Pay Send, Square Cash, Snapchat, WeChat, Kik, Facebook Messenger, etc. 

How Do Payment Apps Make Money?

It is crucial for all apps to ensure that their service gains traction and also remains profitable. And in the case of money transfer apps the various monetization models that can be used are: 

1. Free App

If the app can afford to be available for free then it can really help in gaining initial traction. However, this mode is only possible when the app company has a lot of financial backing, like being affiliated with financial corporations, banks, etc. Smaller companies lack this privilege and thus it may not be the best option for them to go for a Free app.

2. Commission From Payments

This is another app monetization model where the apps can charge commission for the transactions. For example, in the case of Square App, they use this model and they charge different commission amounts from different types of users. Like businesses accepting Square Cash for online payments are charged a 2.75% fee on each transaction whenever the user makes payment via app or a Cash Card. Then the ATM cash withdrawals have a fixed $2 fee on each transaction. The fee to send money from a Credit Card is 3%. The Cash App charges a service fee for Bitcoin transactions as well. Meanwhile, for Stocks the Square doesn’t charge any service fee but it charges a fee required by SEC.

Also Read: How Do Free Apps Make Money?

Top Mobile Payment Services Similar To Cash App

Among the most popular payment services are:

1. Venmo

This is not any typical payment-to-payment app, rather it is a social payment app. There are people who often split checks at cafes, restaurants with their friends and prefer online payments, so Venmo is the right platform for them, and also it is free-to-use. The app is available for both iOS and Android users. 

2. Payoneer

This app offers an all-inclusive peer-to-peer payment app service with its presence in over 200 nations. It is considered among the best alternatives to the Cash app where it provides many features such as Multi-currency e-wallets, payment requests, currency conversion, custom invoices prepaid cards, and many more. Also, it is free-to-use and available on iOS and Android. 

3. PayPal

Simple to use, PayPal is a popular platform for online transactions and it provides free services to the customers. That way they are able to send & receive money with ease and assured security. This app has a user-friendly interface and a highly responsive design. It is available on both iOS and Android. 

Why Invest In Developing Payment Transfer Apps Like Cash App

What Are The Key Features Of A Money Transfer App Like Cash App?

Features have a major role to play in the peer-to-peer payment app like Cash App. When your app is integrated with the essential features the chances are higher of it being embraced by the target audience. And some of the essential features that can make a difference in your Cash app-like Money Transfer app are: 

1. Send Money To Anyone

This simple yet useful feature allows the app users to click instant money to anyone using the Cash app with just a click of a button. The whole transferring process is easy and instant.

2. Spend Money

This feature allows the payment app users to make easy payments for their purchases or spending. The payment can be made instantly from the app without any hassle. 

3. Direct Bank Deposit

Whenever an amount is received in the Cash app and the user wants it to be transferred into their bank, then for that purpose the app can have this feature of Direct Bank Deposit, which allows the user to directly deposit the money into their bank. 

4. Buy Stocks

This feature offers freedom to the app users to invest in the stocks they desire to invest in. Usually, there is no stock trading fee implied in this process, however, the users might be required to pay a fee to the government agencies.

Advanced Features To Be Considered For The Payment Apps

1. Push Notification

This feature is responsible to send instant alerts to the app users from the app. These are usually customized alerts and messages that can be sent to the users instantly.

2. Unique ID & OTP verification

This is useful functionality for payment apps as it ensures security. To use the app the user will require to make a unique ID that they have to use every time they open the app and OTP verification for each transaction they make from the app.

3. Chatbot Integration

When the Chatbot feature is integrated into the app it ensures that the app users have a smooth way through using the app, as they can connect with the chatbot for any assistance and get timely solutions to their issues.

4. Banking Partner Management

This feature is an important one for the payment app as it makes it easier to manage the banking partner and its workings with the app. As in the payment apps, users link their bank accounts with the payment app to make fast transactions and to add money into their payment app. 

5. Real-time Analytics & Dashboard

It is a functionality that makes it easier for the admin to keep an eye on the activities of the users in real-time and make the right measures to provide them a better experience with the app. 

6. CMS System

For any app, content is a crucial aspect and this also holds true for the payment apps, and hence there is a CMS feature that can be integrated into the app to monitor the app content. Essentially, it is to create, manage, and optimize the digital experience of the users. 

Compliance For A P2P Money Transfer App Need To follow

For the financial services and products, it is important to abide by the regulations and in this case, the regulations take care of the many aspects of payment transfer apps, such as data protection, management, and cybersecurity. And here the purpose is to protect the consumers from financial risk. Several regulations to comply with while creating P2P money transfer apps are: 

1. Federal Trade Commission (FTC)

When the financial product is targeting consumers, it is vital to comply with the consumer protection regulations that are set by Federal Trade Commission (FTC). This agency is responsible for dealing with fair business practices, data protection, and privacy. An important FTC regulation is Gramm-Leach Bliley Act (GLBA) that needs financial institutions for explaining to consumers how their data is shared & protected. There is also FCRA (Fair Credit Reporting Act), which is a set of guidelines for the companies to collect credit data.

2. General Data Protection Regulation (GDPR)

In European Union, GDPR is high-regarded for data privacy. This regulation act lays out the data handling & privacy protection rules. The law applies till the user data of EU citizens is stored by the app, even when not operating in the EU.

3. Anti-Money Laundering Regulations (AML)

This is yet another important law that needs to be addressed. In the USA, AML is enforced by the Bank Secrecy Act of the US Treasury & US Patriot Act. When the app offers cross-border transfers, AML is a regulation that is required to be taken care of.

4. Electronic Fund Transfer Act

Payment transactions come under EFTA (Electronic Fund Transfer Act) of Federal Reserve & Regulation E of Consumer Financial Protection Bureau (CFPB). 

All in all, dealing with compliance can be complicated, expensive, and confusing, however, there is no way out of it and this has to be addressed. It is advised that the compliance process be started as soon as possible. It can be helpful to hire a lawyer with experience in financial regulation in the desired country. RegTech tools can also be used to help in automating & streamlining the compliance workflow. 

Points That Need To Be Considered While Developing Money Transfer App

What Tech Stack Is Required To Develop A Payment App Like Cash App

Required Mobile App Development Team Structure For Payment App Like Cash App

Creating an app-like payment app, such as a cash app, necessitates the use of cutting-edge technology. As a result, you’ll need a team of experts to help you create a unique and engaging app.

Essentially, your team should consist of the following individuals:

• Business Analyst
• Project Manager
• Mobile App Coders (Android and iOS)
• UI/UX Designer
• QA Engineer
• HTML/CSS DeveloperTester

All of these experts will be involved in the various stages of development. You can submit the app to the respective app stores for approval once it has been developed and rigorously tested.

How Much Does It Cost To Develop A Payment App Service Like A Cash App?

As it comes to determining the cost of developing a Cash-like app, there are a number of factors needed to be considered as such:

Number of functionalities and features in the app, manpower used, number of hours spent, country of the app development company, technologies used in the app, number of platforms (iOS, Android, or both), Admin Panel features, and Backend requirements. Considering these factors, a rough cost estimate of the app development can be determined, and as per the development, the cost can be anywhere between $25000-$30000, when the app is being created for a single platform with basic features. And when the app is being created for more than one platform and with advanced features than the cost also doubles, and may go up to $50000-$60000.