Snapchat lets you send friends videos, pictures and, now, your share of the brunch bill. On Monday, the company unveiled "Snapcash" --- a feature in its app that lets you send money from your debit card straight to your Snapchat contacts.
Snapchat announced the new option on its blog and in a glitzy, almost Busby Berkeley-style musical message to users:
Users will be able to tie their Snapchat accounts to their debit cards, and essentially text cash between them. When someone types in, for example, "$15" in the Snapchat app, a green button will show up giving them the option to send that amount to their friend. According to TechCrunch, if the recipient doesn't take the money within 24 hours, it's refunded back to your account. The feature is currently in the Android app and is coming soon to iOS.
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Snapcash is a pretty direct competitive move on the mobile payments application Venmo, which also makes it easy to send payments to friends by phone. The service is popular among young adults, particularly college students -- or, basically the exact same audience that Snapchat targets. It could be hard for Snapchat to crack into the market, but it does have the advantage of being able to tap into an existing user base.
But wait, you may say, hasn't Snapchat had some privacy and security issues in the past? Would I want to trust them with my cash? To address some of those concerns, it may comfort you to know that Snapchat itself is not handling any of the actual financial information here -- it's passing all of that on to mobile payments company Square.
The move tips Square's hand a bit more as the company looks to expand its foothold in the increasingly competitive space of mobile payments. It's certainly not alone in looking to make mobile payments something that the average person actually feels safe doing. The Apple Pay program, for example, gets its gravitas from partnering with big banks and big brands -- not the least of which is its own.
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But Square, particularly with the Snapchat deal, is in some ways hitting that goal from the other direction -- by gathering a coalition of smaller businesses and services that probably no one had ever thought to wrap payments into to spread its brand. Square also announced Tuesday that it will begin letting its vendors sell physical gift cards to their stores -- meaning that you could theoretically get a gift card to that cute little stall at the farmers market. As with the Snapchat agreement, Square is handling all of the financial transactions for these small vendors, and promises no transaction, subscription or redemption fees.
If the features work safely and easily, then this could be the beginning of several beautiful friendships for Square.
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