If the massive shift toward zero-free stock trading we saw among discount brokerages a few weeks ago wasn’t enough, there’s now another option for buying and selling stocks: Square’s Cash app. Known mostly as a peer to peer payments platform, Cash has previously branched out by offering their own debit card and allowing users to buy Bitcoin. However, their latest offering enables customers to purchase fractional shares of stock in select companies with just a few taps.
Square has actually been rolling out this feature for a few weeks now. Yet, it wasn’t until I opened up my app this afternoon that I saw the update had finally reached me. This gave me a chance to give the platform a shot and buy $1’s worth of — what else — The Walt Disney Company.
Before I could complete my transaction, Cash let me know that they’d need a bit more information first. This process started with me entering my e-mail address and Square sending me a code I’d then enter for confirmation. Interestingly, the next bit of info they requested was my employment status. Furthermore, after noting I was self-employed, they asked for the name of my business. Finally, the app asked if anyone in my family was associated with a brokerage firm or FINRA and whether I knew anyone who was an officer, director, or 10% shareholder in a publically traded company. After answer that, it was back to the matter at hand: confirming my purchase.
With my account set up, purchasing shares was pretty much a breeze. Cash allows you to set up a watch-list for stocks, view other lists such as “Most Traded” and “Biggest Daily Movers,” or search for a specific company using the name or ticker symbol. Once you find a stock you want to buy, a pop-up will offer the option to buy $1, $10, $20, $50, or $100 worth. Alternatively, you can enter a custom amount. Notably, if you’re making a purchase after hours, the app will tell you when your order will be placed (in other words, when the market will reopen). Meanwhile, selling appears to be just about as easy, although I have yet to offload my .007% of a share to know for sure.
As for what stocks are available to trade, it’s not exactly clear how many companies the app offers. That said, from just poking around, it seems to be mostly larger and more well-known companies. Of course, that makes a lot of sense for such a product — especially since it’s unlikely Square is making any money on it.
While I’ll need to spend some more time with Square Cash’s new fractional shares feature to see how it compares to SoFi Invest‘s Stock Bits and others, I’m pretty impressed with the platform so far. More importantly, I think its existence will help expose millions of younger adults to the concept of stock trading. Of course, you could argue that these newbies would be better off investing in index funds than buying single company stocks — but, honestly, buying a small piece of a big, beloved company is far more exciting than buying some $VFINX. Thus, I’m inclined to call this addition a win and will definitely be keeping an eye on it.