Square Cash, You’ve Changed

Square Cash, the peer-to-peer payment service by Square, has undergone some changes over the years, and some of them I do not like. However, the final straw came when they required me to verify my account by connecting to Facebook to add funds to my Square Cash balance. To echo the sentiment that John Gruber holds towards Facebook, I’d like to tell Square Cash… we can’t be friends!

I was a fan of Square Cash for years, and I even defended it against my friend’s protestations. In fact, I preferred using it to other peer-to-peer services such as Paypal or Venmo, which are incidentally owned by the same company but do slightly different things. Venmo, for example, has emoji.

Square Cash was better than either of these peer-to-peer services because:

  1. You could send money via email. This was so simple. You emailed your friend and cc’ed cash@square.com and put the amount in the subject line. After a quick setup, the money was transferred between user’s bank accounts.
  2. Square Cash used debit cards to process transactions, instead of ABA routing and account numbers. This made signing up a lot faster and, also, most banks offers some fraud protection with debit card purchases. I don’t believe they offer such protection with these ABA transfers. How secure can an ABA transfer be, considering that it was developed in 1910?
  3. Most payments were free and instantaneous. When you sent money, it would charge your debit card as a purchase and then withdraw the funds from your checking account. When you would receive funds, it would add the funds to your checking account, as if you had returned a purchase.

But over the years, many of these advantages have gone away.

  1. Most transfers over email fail so you have to use the mobile app or login to your account on a browser to send someone money.
  2. New users reports that they must provide an ABA routing and account numbers when sending money over a certain amount.
  3. Transfers from one bank account to another are no longer instant. Now, you must “cash out” to transfer the money to your bank account. Also, instant transfers to your bank account are no longer free. You can opt for an instant transfer, but Square will deduct 1% of the amount as a fee. Next business day transfers, however, remain free.

I don’t mind that last one because as I wrote years ago, they need to make money somehow, which is why they made a virtual debit card that you can add to your Apple Wallet and pay anywhere Apple Pay is accepted. The card withdraws from your Square Cash balance. I liked this feature because it allows Square to make money from the merchant via the interchange fee, and it doesn’t directly cost me anything.

When AT&T revamped their unlimited wireless plans earlier this year, they offered a $10 discount to customers who signed up for auto-pay with a debit card or a bank account. (Credit cards are excluded presumably because it costs AT&T more to process these payments.) When I changed to the new unlimited wireless plan, I added my Square Cash virtual card as the payment method for my AT&T Wireless account. This made sense because two other people pay me for their share of the wireless bill through Square Cash, and it was more convenient for AT&T to just bill against my Square Cash balance instead of transferring that balance to a bank account and then paying AT&T there.

Billing against that Square Cash virtual card, however, has been painful.

For the first month, I didn’t have enough funds in my Square Cash balance to cover the transaction so it failed due to insufficient funds. This seemed counter intuitive. If I initiate a peer-to-peer payment and don’t have enough funds, Square Cash will charge my debit card to cover the transaction. This was not expected behavior.

To get around this, I had to add funds from my checking account. Since my bill is about $200, I tried to add $100, but when I did, I was surprised to see a request to connect my Square Cash account with Facebook.

No, Square Cash! We can’t be friends.

Dammit, Square! I don’t have a Facebook account! Well, I do have an account, but I deactivated it almost three years ago after Sarah and I split up. While I have long ago recovered from that break up, I really enjoy not having a Facebook account, and I don’t see adding $100 to my Square Cash account as the reason to reactivate it.

There’s no way around this. There are only two options: selecting “Continue,” which takes me to a Facebook login page, or tapping on an “x,” which only returns me to the previous screen. If I tap on that “x,” I’m back trying to add $100 to my Square Cash balance, thus requiring me to connect a Facebook account. I’m caught in a loop.

I asked Square on Twitter about this. However, I forgot to include a screenshot, although I did link to Gruber’s post about Facebook.

To their credit, they did reply.

But I am not starting out. I’ve been using Square Cash for several years and have transacted thousands of dollars in that time.

The ironic part of all this is that I am encountering this problem because I am trying to let Square Cash make money. Assuming a 1.5% debit card processing fee, Square stands to make about $3 from my nearly $200 monthly wireless bill.

I did find a workaround. Like a criminal, I have to “structure” my transfers, adding small amounts, around $50, each day to build up enough of a balance to cover my wireless bill. That avoids the requirement to connect my Facebook account to my Square Cash account.

But I’m not doing this again. I am switching my payment method over to my bank’s debit card. I’m certainly not reactivating my Facebook account just to make Square a few bucks.

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