Video: Snapchat introduces new P2P payment system ‘Snapcash’
Snapchat has unveiled a new payments system, Snapcash, through which users can send money to friends.
With Apple Pay now on the scene and Amazon working hard on its Wallet offering, the mobile payment scene is becoming more crowded and complex. Even Twitter has recently been working on a system by which friends can tweet to each other.
The next tech firm to unveil its own mobile payment system is Snapchat – and as it announced in a blog post on Monday (November 17th), the social messaging brand is investing heavily in peer-to-peer payments (P2P).
Snapcash is the fruit of a partnership between the company and payment tech firm Square, whose Square Cash service allows users to type a dollar amount into an email subject line and use that to send money to their friends.
The new service works along the same lines – but instead of an email, Snapchat users can type an amount in dollars into the chat screen, which turns the send button into a dollar sign and begins the payment process. The company released a video to announce the development.
When users send money for the first time, they’ll be asked to link a debit card to the app, and the recipient will also need to connect a debit card before they receive the cash. They have 24 hours to do this, and if they don’t the sender gets their money back.
However, there’s no way to cancel a transaction at the moment, so it’s probably a good thing that there is a limit on how much can currently be sent using the app.
As with all mobile payments security is still the watchword, but Snapchat insists it’s taken plenty of precautions. Cash can only be sent to people the user has recently messaged, and Snapcash notifications don’t disappear in the way that other messages do on the messaging app.
It makes sense that Snapchat would be looking to make the most of the booming e-commerce market. The social media industry as whole is shifting increasingly towards that field, but for Snapchat – which still has virtually no revenue, yet was recently valued at as much as $10 billion – it’s also a lucrative option that could continue to fund the free messaging service.
The same is true of perennial loss-maker Twitter. It will be interesting to see how their payment services develop.