Yesterday, mobile payment startup Square announced a new service, Square Cash.¹ Square Cash allows users to send payments without any transaction fees to individuals through email. Transfers are 100% free for both the recipient and the sender. The process is quite simple: the sender composes an email to the recipient with cash@square.com cc’d, setting the subject of the email to “$ [amount].” The recipient will then, “receive an email prompting them to link a debit card to fund their first payment. To accept a payment, the recipient enters their debit card number once, and will automatically receive funds to their debit card thereafter.”² Although this is an awesome feature, Square was far from the first with such an offering. The media, however, would have you believe that this is the most groundbreaking mobile payment feature ever conceived.³ Square Cash is unique, however, in that users are not required to have or create an account and/or download an application – although there is an app should you choose to download it.⁴

As there has been a no mention of Square Cash’s competition – aside from Venmo – it seems appropriate to examine some of the alternatives:⁵

Dwolla

It is mind-blowing that only one article written about Square Cash contained a reference to Dwolla.⁶ Dwolla has not only enabled users to send payments via email – and several different ways: through phone numbers, Facebook, and LinkedIn to name a few – but has partnered with the State of Iowa, allowing Iowans to pay various state taxes using their platform.⁷ The Des Moines startup, “securely connects to your bank account and allows you to move money for just $0.25 per transaction, or free for transactions $10 or less.”⁸

What’s even more, Dwolla handles bulk payments. MassPay allows users to pay out up to 2,000 people at once through the Dwolla network, with the same fee structure – payments < $10 – free, and $.25 fee for all payments greater than $10.⁹ The fact that Dwolla charges a fee, however minimal, seems to be the only reasonable explanation for their absence from all but one article about Square Cash.

Venmo

Venmo has come up in nearly every article about Square Cash, but it is still worth mentioning.¹⁰ The platform allows users to send money over email, but they allow you to use either a bank account, Venmo account, or debit card for free, and with a credit card for a 3% fee. Pretty straightforward. Venmo was acquired by Braintree in 2012, which was acquired by PayPal in September 2013. Which leads up into the next Square Cash alternative:

PayPal

What can be said about PayPal? It is more or less, the standard. PayPal has such a large footprint that it is, essentially, the default network for online payments and money transfers. There is enough trust in PayPal that business and individuals, however reluctantly, continue to pay incredibly high fees to use the platform.

While Square Cash is the buzz of the day, there are alternatives. There are benefits to all of the above, but Square’s offering stands out in that payments are free and an app or account is not required. The battle for mobile payments is hardly over, and some wonder if there is even a real need for such a thing.¹¹