With a cash app, small businesses, farmers market vendors and hair stylists – to name a few are able to accept payments in a more modern way than writing checks. In the past few years, many small businesses have embraced the use of digital payment platforms. PayPal, Zelle, & Venmo TaxationĪs a merchant or individual, you need to know the IRS rules for reporting cash app income. As a result, the IRS has implemented rules for reporting cash app payments received. Today, many businesses are accepting payments from all three of these digital payment platforms. Anyone sending money to another Zelle user account must know the mobile number and email address of the recipient. Zelle attaches a bank account with a mobile number and email address of the user. Zelle’s lack of fees offered a distinct advantage over other cash-apps. Realizing that cash apps were the way of the future, several U.S.-based banks including Bank of America, Capital One, Chase, US Bank, Wells Fargo and others joined forces to launch Zelle, a cash app that can transfer funds from one bank account to another. It was not surprising that PayPal bought Venmo just one year later. By 2020, some 52 million people were using Venmo. They launched their platform in 2011 and took the stress out of exchanging money between friends.
That gap was bridged by two enterprising young men who were randomly assigned to share a college dorm room.
While PayPal met the needs of merchants, it didn’t really address sharing money between two friends. PayPal now has more than 286 million users transacting business. However, after just two years, the founders decided to focus solely on payments on the internet. Small businesses and consumers quickly embraced PayPal with the company handling more than $3 billion in payments from 10.2 million consumers and 2.6 million merchants within three years of opening its doors. PayPal users would share their emails, banking and credit card information in return for fast, low-cost payments. The original cash app was PayPal which launched in 1998. Cash apps provide a quick and easy method for splitting the check in a restaurant, loaning a friend money or even paying for Girl Scout cookies. Digital Payment platforms such as PayPal, Zelle and Venmo were originally intended to allow friends to quickly transfer money between each other.
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