In its 2.13 update yesterday, mobile payments app Square Cash introduced the “Cash Virtual Card” into its iOS app, letting users create a virtual Visa debit card that lets them spend their Square Cash anywhere that accepts Visa online (via Recode).
Square Cash users can check out at retailers like Amazon, for example, and simply enter the card number for their virtual card during the check out process. The company is also reportedly working on making the new virtual payments compatible with Apple Pay and Android Pay, “making it possible to use Square Cash funds to tap and pay in stores that accept mobile payments.”
The obvious question is why someone would choose to use a Square Cash account — either in a store or on a website — instead of their regular debit or credit card. A spokesperson cited push notifications triggered by purchases — something that some services like Apple Pay already employ — as well as easy-to-browse digital receipts as potential incentives.
The update brings Square Cash a little closer to PayPal in functionality, but users on Square Cash are relegated to spending money only within the app’s account and are unable to draw from funds in their back-up bank accounts. With PayPal, if users over-spend the funds in their account, the app will fall back into the attached bank account to make up for the difference.
Square Cash is also changing up how instant deposits work in an attempt to make more money from each transaction on the app. Now, users who receive a payment can withdraw the money to their bank if they’re willing to pay a one percent fee for the same-day withdrawal. If not, the money will be deposited in their bank on the next business day for free. The monetization of its withdrawal service is an attempt by the company to catch up to more popular mobile wallet apps.
Users can create their virtual Visa card within the Square Cash now, only needing to enter a billing address to associate with the card to get things started. The Square Cash app is available on the App Store for free. [Direct Link]
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