It was just recently that I found out that Cash App is publicly traded under the parent company Square and you can invest in Cash App stocks with 100% reliability! What could work better than an earning opportunity through the app that you use every day, right? So I will be sharing my two-cents here on how Cash App stocks work and why you should consider investing here.
What To Know About Publicly Traded Nature of Cash App?
Cash App is owned by Square since 2015. Due to the nature of the parent company, Cash App is also publicly traded with Square have been listed on NYSE under the symbol of SQ. Cash Does does not have stock symbol of its own but you can acquire it through Square.
You should have some basic knowledge of Cash App ticker symbol, SQ, market capitalization and share price before you consider investing through the app.
I will first walk you through this information and then tell you about how to find and buy stocks on Cash App.
What Is Cash App Parent Company?
Cash App peer to peer payment app is owned by Square. Its basic operation is to make it convenient and fee-free to send and receive funds from friends and relatives. The app started functioning in 2010 and became publicly traded by 2015.
Cash App does not have stock symbol of its own and the value on the stock market is also linked to the parent company. You can invest in Cash App stocks through Square.
Does Cash App Have Stock Symbol?
As I mentioned above, Cash App does not have a ticket symbol of its own. It stock symbol is SQ which the same as the symbol of Square listed on New York Stock Exchange.
As per data from the previous couple of years, Square has market work of 98.19 billion and Cash App, with market worth around $30 billion, is one of the prominent source of its revenue.
How Does Cash App Make Money?
You must have noticed by now that Cash app money transfers are free. The app also promises free sign-up to the users. When I was new to this, I wondered how Cash App make money then?
Well, the app has its own channels to generate revenue. Some of these are:
- Cash App Charges Businesses: You can create a personal or a business account on Cash App. The business accounts are meant for larger payments and obviously has higher cap on transfer limit. Cash App charges 2.75% for each business transaction. Sending money from your Cash App account to a business account or using the Cash App prepaid card to make a payment to business both come under this type of transaction.
- There Are Fees for Instant Transfers: Cash App transfers are free as long as you choose standard mode of transfer which take up to three days. If you send money instantly to the other account, the app will charge of 0.5% to 1.75%.
- There Are Fees for Credit Card Transfers: Cash App supports payments via credit cards but, as compared to debit card transfers that are free, credit card-based transfers will cost you 3% transaction fee.
- ATM Withdrawals Are Not Free: There is a way to avoid paying Cash App ATM fee but generally speaking, ATM withdrawals are charged $2. This fee can be avoided only if you make $300 deposit to your account every month.
- There Are Fees for Bitcoin Purchases As Well: You can buy and sell bitcoins on Cash App. This service was free until 2019 but in recent years, Cash app has been charging 1.76% for bitcoin purchases. It also makes revenue from the differences in the exchange between bitcoin exchanges and the users.
How To Buy Stocks In Cash App
The protocol may seem confusing at first but trust me, the only difficult step is to begin! With Cash App you will have ready-made access to numerous publicly listed equities and ETFS. You just need to find the stocks that suit you best!
You can explore the investing options from the Cash App main screen. Simply tap on the search bar and then enter the name of the corporation or ticker symbol of your choice.
It would be smart to choose any of the supported firms that have considerable trading activity over at least a month. Once you have made up your mind, following these guidelines to begin purchasing stocks in Cash App.
- Open the main screen of your Cash app account.
- Then tap on the Investing Options.
- Select the name of the firm or company whose share you want to purchase.
- Tap on the Buy option.
- Then choose the amount of investment either from preset values or your own.
- Follow on-screen instructions to proceed.
- When asked to enter personal information, provide valid data only.
- Verify the transaction through Touch ID or PIN ID.
This should conclude the process! If you have any trouble with making this work, contact Cash App customer support team for further guidance.
What Stocks Are Supported By Cash App?
Cash App authorities can very well see that the demand of stocks by the clients is rising. To counter that, the company also intends to improve the range of its offerings, however currently, the app presents around 1600 stocks for you to invest in.
Cash App is striving to adhere to certain requirements and confirm the stock fulfills a criteria before getting it on the list. This is a major reason why the number of stocks available here are limited. These requirements are:
- Listed on New York Stock Exchange.
- Listed on Nasdaq Stock Market.
- Carrying broker-dealer supported by DriveWealth.
- More than 1 billion dollar in market valuation for at least 30 days.
- More than 5 million dollars in average daily transaction volume for previous 90 days.
The authorities have strict policies about not removing any stock that has already been listed. The only exception to this rule is when the stock is exchanged, merged, mandated or acquired through carrying broker-dealer.
What To Look At When Buying Cash App Stocks?
The procedure of buying cash app is simplified if you are aware of certain points of consideration. Let me tell you what to look into before finalizing a stock purchase.
- Brokerage: A reliable broker is the key to a smooth stock transaction. You would need guidance on which stocks to buy/how to buy them and a good brokerage should have your back throughout the process. They should be able to guide you on other platforms that can be used for trading. Their service, however, comes with a cost. Commission for a brokerage varies depending on their services and years of experience.
- Shares: Once you have the brokerage with you, he or she will be able to advise you on how many number of share should you buy. This decision depends on your budget as well. Nonetheless, it is an important decision that must be made only after considering market fluctuations, potential risks, etc. Discuss with the brokerage how long you should carry out this investment and what you expect out of it.
- Order: There are different types of orders prevailing right now in the stock market. When you have decided on the number of shares, you should figure out which type of order you want to proceed with. The most popular choice if market order which involves buying and selling stock/security almost immediately. Other than that, you can also go for limit order or stop-loss order that is converted to market order after a certain price is reached. Lastly, a sell-stop order pertains to a specific price relative to the ongoing value in the market.
- Execution: You can then proceed to finalizing stock purchase with the help of the brokerage. This is the final step and its exact protocol depends on the platform you will be using for trading.
Why Should You Consider Investing In Cash App?
There are many factors that make Cash App a good platform for investors especially who are just setting foot on this journey. This is because the company promises low commission structure and interested people can invest small fractions conveniently.
Users who want to invest in IRAs should consider means other than Cash App.
However, the market is not deprived of alternatives either. For example, I can across online data that shared that Block trades at 3.9 times this year’s sales, and PayPal, Affirm trades at 4.4 and 9.0 times 2022 revenue. Further high investment opportunities are expected in the year to come.
If the interest rates do increase, the situation would not look friendly for Cash App as that means underperforming platforms are penalized and the app happens to fall on that list.
Although the app has potential, it is still in the growing phase. The tough competition can make market environment difficult to survive for platforms with restricted margins. I would suggest that if you really wish to invest here, consider putting in small amounts by fractional shares only.
Is Cash App Investment Safe?
Considering the market value and the extent of its operation, it is safe to say to Cash App is a reliable platform for trading. I had my doubts in the start but there are nothing but good reviews online.
Moreover, there are always risks associated with investment. The same holds true for Cash App as well. Although there is a very low probability of losing your stock to scams or frauds, other factors like market fluctuations and risks can result in a loss.
Is Cash App Stock Exchange Regulated?
Cash App is a great platform for making digital payments and it is a reliable place to invest stocks as well. However, I would strongly suggest that you check tax regulations and rules for the app before making any investments.
You should have complete idea about how income earned through the app is regulated before you begin.
Zelle reports to IRS but same information is not discussed clearly by Cash App leaving room for some ambiguity. It is better that you get in touch with customer support service and ensure that the funds you earn here are tax-deductible.
Before You Go!
Cash App is a name now well known to almost everyone in the US! Besides basic helpful features like borrow money from Cash App, the platform is continuously working on other tools that can make it user’s favorite.
With the ability to sell and buy stocks on Cash App, the company has considerably expanded its horizons as one of the most widely used payment app in the country. However, it does have a long way to go since investment opportunities are flooding the market. Things don’t look smooth for participants like Cash App that are just starting out!
Miriam Caldwell is a dedicated & expert freelance writer to educate people about personal finance management and budgeting. She shared her knowledge and published the articles at TheBalance.com, GOBankingRates, and BlissfullyDomestic.com. Many financial institutes pick Caldwell as the brilliant source for educational personal finance content.