square cashSquare Cash is launching a new easy-to-use payments platform, targeting small businesses looking to replace cash and checks with debit cards.

If you aren’t familiar with it already, Square Cash was built by the same San Francisco company that made credit card payments simple for anyone with a phone to accept payments.

For more than a year, Square Cash has been used for peer-to-peer payments, like PayPal or Venmo. You also may be familiar with Square Cash through its partnership with Snapchat, which adopted the payments platform to launch Snapcash in November.

Today, Square is launching Cash Pro, which allows businesses to accept debit cards for a low rate of 1.5 percent per transaction, rather than the 2.75 percent Square and other payment providers normally charge.

The big difference is that merchants, who use Cash Pro, won’t be able to accept credit cards — only debit cards, which tend to cost less to process because they are tied to a user’s checking account. For individual users, who sign up for personal accounts, all transactions will continue to be free.

squarecash12The fun part of this service, which Pro and non-Pro users can both participate in, is something Square is calling a “$Cashtag.”

A $Cashtag is a screen name that you can share with customers or friends to make it easy to make a payment when visiting. Square suggests visiting the Wikimedia Foundation’s account at cash.me/@wikipedia to understand how it works, but I set one up at cash.me/triciad because it’s that easy.

When visiting an individual’s cash.me website, people can enter a dollar amount and hit next, prompting them to enter a debit card number and other financial details. If they haven’t already signed up, they’ll also have to activate a new account by entering a phone number or email address.

Just like Square’s original service, this will definitely appeal to small businesses, but less likely a taxi cab driver, and more likely a charity or street performer, as Square suggests in this video.

The service also has a dedicated phone app for both iOS and Android. Once opened, the app asks for a dollar amount, and then click “request” or “send.” In the next form, you enter a $Cashtag, a phone number email, with a short note explaining what the payment is for.

In summary, it’s really easy, kind of fun, and super cheap compared to what the competition is offering today since most providers offer a flat fee and not a tiered service for debit and credit cards.

For instance, PayPal’s standard fees are 2.9% plus 30 cents per transaction for Web-based transactions. On a $100 payment, that’s the difference of paying $1.50 with Square Cash and $3.20 with PayPal. Venmo, which is also owned by PayPal, only works with individuals, but hints that a service may be coming for businesses.

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