Small Business

Just Say No to Cash App

I’ve been seeing online the many requests for Cash App deposits to help keep small business afloat during this pandemic and I want to implore all you owners out there to just say NO.  

Cash App, a division of Square and is a great source to get quick funds from friends and family (along with Venmo, a division of PayPal) but in the long term it is not a great tool for small businesses trying to build and grow their businesses.

Did you realize Cash App has a policy specifically for sellers of goods or services?

Me either. Their terms of service previously stated the app was not to be used for business.

But according to their new terms if you are using your account for business you should have an official badge or insignia that designates your account as a “Cash for Business” account. But I haven’t seen any accounts with that badge. Have you? And I don’t see how to actually apply for it.

Cash for Business terms of service

If you are a nerd like me and read the entire section of the terms of service you will also notice it mentions that applying for this badge in essence is creating a Square Account. Which you probably should have done from the start IMO.

I’m also concerned that your Cash App account is not FDIC insured. 

This means that the money in your account isn’t protected by the government if a hack occurs. They have multiple versions of their terms of service which highlight the fact that once your money leaves the bank account connected to your Cash App account it’s no longer protected.  Here are a few snippets I pulled from the website:

Stored Balance Disclosure Additional Cash Terms of Service
FDIC policy from the Cash LDDA Terms

You can access and read the full terms of service here

I do want to be very transparent here I do use Cash App. But for PERSONAL transactions only.

And while it may seem like I’m picking on Cash App I promise you I’m not.  I’ve always felt this way when I heard of people using it for business.  Because it is difficult to track exactly what you received and spent money for for bookkeeping purposes.

My issues with this app were brought to my attention recently when one of my current clients account was hacked. 

We learned a few disturbing things during this situation (which still hasn’t been fully cleared up BTW).

Cash App does not have second factor authentication. 

You know that pesky additional log in step where you enter a separate code that has been texted to you after you have already logged in.  One purpose of this step is to prevent someone from changing the password or email address you have set up on your account and basically remove you from your own account.  

Well guess what?  This very thing happened to my client.  She was unaware that the email and phone number on her account had been changed until it was too late.  By the time she realized it the hackers had already requested and received hundreds of dollars from her friends and family which they happily sent because she has a great support system.  And this is on top of the money she has sitting in the App that the hackers immediately transferred into their own bank account.  

So far the hackers have gotten away with transferring thousands of dollars into their own bank accounts with no recourse from Cash App.  Leaving my client to wonder… Will I eventually be responsible for paying this money back?   Not only is she concerned about this but she is out of the money she had sitting in the account that she would have used to take care of her family with seemingly no hope for getting this money back.

The other thing we realized during this whole ordeal is that you can not get in contact with a real life person at Cash App

The phone number leads to an automated message.  Their contact us section on their website leads you in a circle to read their FAQ’s.  I basically had to reach out to them on Twitter for her to even get an email response.  And again this situation still hasn’t been resolved.

So I implore you when you are requesting money for your business please exclude Cash App from your tool box and use financial apps that are designed for business use such as Square or PayPal instead.  

However, if you are looking to crowd-source funds fast consider setting up a Go Fund Me campaign instead asking for Cash App donations.  There is a partnership program they have going on called the Small Business Relief Initiative that will allow you to receive a matching grant of $500 for your business once your donations reach $500 (until the fund is depleted).  To learn more about the Small Business Relief Initiative, the requirements and how to apply you can click here.