Worthless Cash

The future, apparently, has not quite yet arrived.

Square Cash promises to be the easy way to transfer money over the Internet. To send you $50, I just send you an email with subject line “$50″ and a cc: to cash@square.com — whereupon Square Cash, upon receiving the cc:, moves $50 from my bank account to yours. (First time users get an email from Square asking for their debit card numbers so the transfer can be accomplished.) Sounds like the easiest thing in the world. And it’s free.

Unfortunately, it’s worth about what you pay for it. My experience using Square Cash multiple times over the past several days indicates that, more often than not, Square transfers $50 one direction — and then a few hours later transfers it back in the opposite direction, so that on balance, no money changes hands. When this happens, you get an email from Square saying the reverse transaction was triggered by a “problem”. No further explanation.

Emails to Square are met with standard Customer Service gobbledygook that ignores key questions such as “Why is this happening?” and “What can I do to make it stop happening?” and “Going forward, can I count on it to stop happening?”. (It’s just happened yet again, so apparently the answer to the last question is “No”.)

One feels a little churlish complaining about the quality of a free service. On the other hand, I’d like to spare others the frustrating experience of dealing with Square, never knowing when a transaction is going to be permanent, and getting no useful answers from the powers that be. (All communication is by email; Square is apparently too advanced a company to use phones.)

My advice: These guys are amateurs. Stick with Paypal.

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15 Responses to “Worthless Cash”

  1. 1 1 Dave B

    I’d also be a bit worried about security. Their site says nothing about what they do with your debit card details. Even if you trust them what’s to stop someone composing a fake e-mail purporting to be from you and effectively instructing Square Cash to transfer an amount to their own bank account.

    Without some better information about their approach to privacy and security I wouldn’t touch it with a bargepole even if it did work as advertised.

  2. 2 2 Thomas Purzycki

    Nah nah nah nah nah nah nah nah Bitcoin!

    Paypal works great until it doesn’t. It has pretty much the same issues with chargebacks and general customer service opacity regarding why things go wrong, get frozen, get reversed and whatnot.

  3. 3 3 Anonymous

    Holy guacamole! Does Square have any idea how easy e-mails are to spoof? I assume you can’t easily steal money this way, because you need a bank account to use the service. (Or, rather, if you do steal money you’ll be caught and get in big trouble.) However, you can easily harass your frenemies if you know enough people who use Square Cash. If you don’t like someone whose bank account might be running low around the time rent is due (maybe they set up Square Cash so their parents could occasionally help out), forge an e-mail sending money from their account to another Square Cash user you know is out of town. Someone will notice and the transfer will end up getting reversed, but maybe their rent check will bounce in the meantime. At the very least they’ll get stressed out and have to waste time trying to fix the problem. Alternatively, you can try a denial of service attack: if you know someone is going to receive an important Square Cash transfer, start sending forged e-mails and hope Square responds by temporarily shutting down their account.

  4. 4 4 ECSL

    You might want to take a look at Ripple, which promises this (and seems to have users already). The idea behind it seems interesting, but I’m not sure how well it works in reality.

    I’ve never tried it, though, so use at your own risk.

  5. 5 5 Todd

    A friend recommended an app for this called Venmo just the other day. I haven’t tried it yet myself, but he was very enthusiastic about it.

  6. 6 6 Eliezer

    This makes me feel better about all those fees I pay to Chase. At least I’m getting better service than this.

  7. 7 7 RPLong

    My bank offers this service for free. The only catch is that the sender has to log into his/her online banking website instead of his/her email account. Big deal.

  8. 8 8 Daniel

    @ Eliezer,

    Use capital one 360, physical banks are a waste of money.

  9. 9 9 AnonymNYC

    Sounds like a way to get free services and products. What does the seller do to seek (reliable) payment after the reverse transfer occurs? I assume he can send the buyer an email requesting payment by some other means (or to try again via the same system), but the buyer may not comply. What then?

  10. 10 10 nobody.really

    One feels a little churlish complaining about the quality of a free service.

    Who is this “one” you speak of? We bitch about Landburg’s posts on this website all the time, no qualms attached.

  11. 11 11 Mike H

    #1 what’s to stop someone composing a fake e-mail purporting to be from you and effectively instructing Square Cash to transfer an amount to their own bank account.

    #3 Holy guacamole! Does Square have any idea how easy e-mails are to spoof?

    My thoughts exactly. The system can’t possibly work as described. Meaning, if it is as described, it can’t possibly work.

  12. 12 12 Michael Laurenzano

    #1, #3, #11

    With about 60 seconds of effort I found this:

    The Square Cash Android and iOS apps append a cryptographic signature to every Square Cash email in order to establish and confirm its authenticity. When you send Square Cash, we verify the cryptographic signature from your email provider (along with dozens of other unique features) to verify its legitimacy. If your email provider does not support the required security protocols, we send you an email that requires your confirmation before Square Cash is authorized.

    Without more detail we cannot know how secure this system is, but it clearly isn’t as hopelessly and obviously bad as you are assuming.

  13. 13 13 Robert

    Actually, they may not be amateurs. But not in a good way. If they keep the money for a few days, they get the float and any intetest. That may not be much i percentage terms, bu if the volumes are high, its no inconsiderablegiven the low osts associated with a business model that seems to do nothing.

  14. 14 14 Al V.

    @Robert #13, back in the good old days, I worked for E.F. Hutton. One of their strategies was to issue checks on banks in a different state from the payee. Employees in New York were paid by check (this was in the days before direct deposit) on a California bank. California employees were paid on checks from a New York bank. This allowed Hutton to hold our pay for a few extra days as they were interstate transactions. Nice huh? Steal a little money from your employees.

  15. 15 15 larry arbanas

    @Michael Laurenzano

    The paragraph from Square Cash that you quote suggests that there is some cryptographic signatures added to emails coming from the iOS and Android Square Cash apps. What if someone (authorized user, or bad guy) uses a generic email client on an old fashioned pc to transfer money? Traditional email is, in general, very insecure. Perhaps their solution is to not accept or reverse transactions that come from email addresses that are not part of the email big boys (ie @yahoo.com @gmail.com) etc. I would like to see more about this.

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