Snapchat has leapt headfirst into the P2P payments market with a new function allowing users of the messaging app to send money to one another.
The new feature has come about through a partnership with payment-processing firm Square. Snapchat users who are over 18 and based in the US can add a Visa or Mastercard debit card to their account. They then type a dollar amount into Snapchat’s text-chat feature, which recognises the dollar sign and provides a green pay button that will instantly send a friend money.
If the friend fails to sign up and accept the payments within 24 hours, the cash will be refunded to the senders account.
Snapchat has had some privacy concerns in the past, which might discourage people from signing up for its payments feature. But it seems that all account details will be held independently by Square Cash, which will have much riding on this joint venture as it attempts to sideline competitors such as Venmo.
While a financial agreement between Snapchat and Square has not been discussed, both have plenty to gain. Being integrated with Snapchat could net Square serious exposure and additional credit card numbers. This is also Snapchat’s first big experiment with becoming a full-fledged messaging platform, as it eyes the success of China’s WeChat or Korea’s KakaoTalk.
Ultimately, Snapcash is targeting a younger generation who already use Snapchat to regularly interact with their peers, and who may not have thought about downloading a separate payments app. While the ease of integration still needs to outweigh some serious privacy concerns, this is an interesting development for the social P2P payments market.
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