The Cash App is a peer-to-peer (P2P) payment application that enables people to send money to each other at no cost.
The company, which is headquartered in San Francisco, California, was founded in 2013 by FinTech giant Square, now known as Block.
While the app may primarily be known as a method to facilitate free P2P payments, it has since expanded into other facets of its users’ financial lives.
Block initially launched the service as Square Cash in an effort to compete with the likes of Venmo. Back then, it enabled users to send money free of charge simply by adding someone’s email. Square, which was started by Twitter co-founder Jack Dorsey as well as Jim McKelvey, wanted to expand its payment network, which consisted of merchant solutions such as an iPad register and swiper.
Throughout the years, Square expanded the app’s functionality, for example by allowing businesses to accept payments (2015) or adding support for bitcoin trading (2018).
Today, the Cash App offers a debit card tied to the user’s account, the ability to receive paychecks up to two days earlier, the option to purchase crypto or stocks, as well as allowing its users to file taxes.
Consequently, those products have translated into significant revenue figures for Block as well. In 2021, the Cash App generated $12.32 billion in revenue. Moreover, it is highly profitable ($2.07 billion in 2021) due to its fee-based business model.
A total of 44 million people currently access the app every month. Out of those 44 million users, 13 million have, furthermore, applied for a debit card.
It wouldn’t be particularly surprising if Block continues to expand the app’s functionality in an effort to become a financial superapp.
For example, the then-Square purchased BNPL service Afterpay for $29 billion back in August 2021. It could add BNPL as an additional payment option for every merchant in its network while allowing users to pay with their Cash App balances.
However, the company also had to deal with some issues in the past. In April 2022, a former Block employee downloaded secretive information for more than eight million users of the Cash App’s investment product.
The methodology with which competitors of the Cash App are ranked is based on publicly available data. Information such as revenue, (annual) payment volumes, the number of users, and anything else in between will be considered.
Only competitors from the United States will be taken into account since this is the only country Block’s Cash App operates in.
It has to be noted that indirect competitors of the Cash App will, furthermore, be excluded. For example, we won’t consider payment solutions aimed at merchants such as Stripe.
It has to be noted that this analysis should not be seen as an endorsement of either service. It is merely a summary of the competition that Block’s Cash App currently faces.
So, without further ado, let’s take a closer look at the top 7 competitors of the Cash App.
1. Zelle
Headquarters: Scottsdale, Arizona Founder(s): Bank of America, JPMorgan Chase, Wells Fargo Year Founded: 2016
Zelle has quickly grown to become the biggest P2P payment service in the United States. In 2019, just two years after launching, it had already surpassed all other P2P payment apps in the country.
This isn’t particularly surprising given its background. Leading financial institutions Bank of America, JPMorgan Chase, and Wells Fargo began working on the service, which was initially dubbed clearXchange, as early as 2011.
Unfortunately, due to their inability to effectively coordinate, they sold the company to Early Warning Services (which is owned by the three banks), which ultimately launched Zelle in 2017.
The three banks leveraged their industry dominance to onboard over 1,000 financial institutions ever since.
Zelle, unlike the Cash App or Venmo, is mostly known for facilitating free P2P payments. It has yet to introduce ancillary services such as the ability to pay other businesses or a branded debit card. This is because those services would cannibalize the revenue that its partner banks generate from similar products.
Nevertheless, its deep industry ties have ultimately allowed Zelle to become the most popular P2P payment service in North America. In 2021, Zelle processed 1.8 billion payments worth $490 billion, which represented an increase of 49 percent from the prior year. Unfortunately, it doesn’t disclose current user numbers.
Source: Zelle
2. Venmo
Headquarters: New York City, New York Founder(s): Andrew Kortina, Iqram Magdon-Ismail Year Founded: 2009
Venmo revolutionized the P2P payments space by becoming the first mainstream service to offer free transfers between people.
At first, Venmo was designed to allow users to send and receive payments via SMS as early as 2009. Soon after, their inboxes were filled with funny messages accompanying those payments. Those messages, to this day, are one of the key differentiators of Venmo’s platform.
Venmo’s founders eventually relaunched the service as a mobile app back in 2012. Unfortunately, the app’s immediate popularity, which led to over 200,000 downloads within weeks of launching, forced the founders to sell since Venmo wasn’t generating any cash but raking up huge hosting bills.
Months after the launch, Braintree agreed to acquire Venmo for $26.2 million back in August 2012. A year later, in September 2013, PayPal (then still owned by eBay) purchased Braintree for $800 million. It has been owning and operating Venmo ever since.
Venmo, much like the Cash App, has since expanded the functionality of the app beyond free P2P payments. Users can earn cashback rewards, use a company-branded debit or credit card, split bills, and even buy and sell a variety of cryptocurrencies.
Today, Venmo boasts 83 million members in the United States, its only market. In 2021, the firm’s payment volume was equal to $230 billion. Additionally, Venmo has also become a huge cash cow for PayPal. In 2021, the app generated $900 million in revenue.
Source: eBay, TechCrunch, Venmo
3. Apple Pay
Headquarters: Cupertino, California Founder(s): Apple Year Founded: 2014
Apple Pay is a mobile payment service created by the world’s biggest phone manufacturer. It enables users to connect their bank accounts or debit and credit cards and pay merchants by using the iPhone’s near-field communication (NFC) technology.
The service was announced back in September 2014 and rolled out to the firm’s 200 million iPhone owners throughout 2015.
To get it off the ground, Apple simultaneously closed partnerships with the likes of American Express, Mastercard, and Visa to allow users to connect their debit and credit cards. The phone maker, furthermore, acquired multiple companies in the space and incorporated their technology into Apple Pay.
Apple introduced the payments service, as well as other initiatives such as Apple TV+ or gaming subscriptions, to combat the shrinking phone sales the company was suffering from. In the case of Apple Pay, it charges credit card issuers 0.15 percent whenever someone makes a payment.
The smartphone giant has since expanded its payment ambitions. In August 2019, Apple unveiled its own credit card in partnership with Goldman Sachs. Three years later, it launched a ‘Buy Now, Pay Later’ service dubbed Apple Pay Later.
Today, 85 percent of all merchants in the United States accept payments via Apple Pay. Since December 2017, Apple has also been directly competing with the Cash App when it introduced P2P payments (which it calls Apple Cash).
Interestingly, Apple also monetizes its P2P payment service via so-called Instant Transfers. Users are charged a fee of 1.5 percent (capped at $15) if they want to speed up the transfer from one account to another.
Over 500 million people have now activated Apple Pay on their iPhones and smartwatch. Close to 50 million of those can be attributed to the United States. With regards to merchant payments, Apple Pay now has a market share of 43.9 percent in the United States.
4. PayPal
Headquarters: San Jose, California Founder(s): Elon Musk, Ken Howery, Luke Nosek, Mallikarjun Yagnavajulla, Max Levchin, Peter Thiel, Rod D. Martin, Senthil Udayasooriyan Year Founded: 1998
PayPal is the de-facto pioneer in online payments and revolutionized modern commerce as it stands. Much has been said about the firm’s illustrious history, which involved a merger with Elon Musk’s X.com, being acquired by eBay in 2002 (leading to the creation of the so-called PayPal Mafia), and the company being spun out of eBay in 2015.
PayPal is primarily used to pay for goods and services online. Over 30 million merchants are now part of its platform and receive payments from its 429 million active accounts.
Apart from paying merchants, PayPal is also known for allowing users to send money to friends and family at no cost. However, fees are being charged if you send money to a foreign bank account and between two different currencies.
In 2021, PayPal generated revenues of $25.3 billion. A total of 19.3 billion transactions were conducted over that time span, totaling $1.25 trillion (!) in payment volume.
While PayPal is primarily known for facilitating online payments, it also offers a variety of other products. These include BNPL payment options, a branded debit card with which users can earn rewards, or donate to a charity they like, among many other features.
Source: PayPal
5. Google Pay
Headquarters: Mountain View, California Founder(s): Google Year Founded: 2015
In 2015, Google introduced Android Pay to allow users of the mobile OS to pay merchants with their phone’s NFC technology. Three years later, it merged the Google Wallet with Android Pay to create what is now known as Google Pay.
Google Pay, just like the other services on this list, enables users to connect their bank accounts and subsequently pay merchants offline and online. It, furthermore, allows them to earn rewards for everyday payments, understand spending habits, and send money to other users free of charge.
The Google Pay app has been downloaded over 500 million times thus far. While the app is available on iOS devices as well, most of its users own an Android phone. Google’s wearable products are also compatible with the service.
During Alphabet’s Q1 2022 earnings call, Google CEO Sundar Pichai stated that Google Pay had just crossed the 150-million user mark. The service is, furthermore, available in 40 countries across the globe.
Additionally, estimates project that Google Pay is currently being used by 27.1 million people in the United States alone, thus making it one of the most popular payment services in the country.
Source: Alphabet, Google Pay
6. Chime
Headquarters: San Francisco, California Founder(s): Chris Britt, Ryan King Year Founded: 2013
Chime is what people refer to as a so-called neobank. The firm, as opposed to a traditional bank, doesn’t have any physical branches and instead offers its service completely online.
In fact, Chime is technically not a bank. It derives its banking license via a partnership with The Bancorp Bank, which in turn provides its customers with FDIC insurance of up to $250,000.
Interestingly, Chime has also been subject to legal troubles. In May 2021, a Californian regulator ordered Chime to stop referring to itself as a bank. It even had to change its domain name from chimebanking.com to just chime.com.
Nevertheless, those issues haven’t derailed the firm’s growth. With over 13 million users, Chime is widely considered to be the most popular neobank in the United States. The firm is currently valued at $25 billion, which has been made possible by the $2.3 billion it raised in venture funding. In 2021, Chime allegedly generated around $1 billion in revenue.
It offers multiple features such as overdraft protection, free ATM withdrawals, the ability to get paid earlier, and a company-branded debit card.
Since March 2021, Chime also competes with the likes of Venmo and the Cash App when it launched P2P payments. Users send each other money instantly via the firm’s Pay Anyone feature. Everyone receives a $ChimeSign, which is a unique ID that acts as a username.
Source: Chime, Crunchbase, Forbes, Statista
7. Samsung Pay
Headquarters: Suwon-si, South Korea Founder(s): Samsung Electronics Year Founded: 2015
The last technology giant on this list giving payments a shot is Samsung, which entered the space back in 2015. Samsung, in February of the same year, acquired LoopPay, which had previously developed tech that enabled people to pay each other by using specialized hardware embedded in phone cases and other pieces of hardware.
Samsung, starting with the Galaxy 6 smartphone model, began to integrate LoopPay’s technology to offer NFC-based payments. The smartphone maker, at the time, was a much bigger competitor to Apple, which itself had just introduced its payment product.
Samsung Pay, much like Apple’s and Google’s payment products, allows you to connect your debit, credit, or loyalty cards and pay merchants by executing commands (swiping up in the case of Samsung phones).
Additionally, the service enables users to send money to friends and family free of charge, earn cashback rewards, own a branded debit card, purchase train tickets or crypto, and even allows people to add their vaccine records.
In recent times, Samsung also integrated its Pass product, which enables users to store airline tickets, coupons, and more, into the Samsung Pay app.
Samsung Pay only trails Apple and Google when it comes to usage numbers. It currently has close to 17 million members in the United States alone. However, most of its users are located in Asian countries such as South Korea. The service can only be accessed on Samsung-branded phones and smartwatches.
Source: Payments Dive, Samsung, Vox
