November 20, 2014
Snapchat users will now have the ability to send and receive money from friends using a new payment feature called Snapcash. The feature is the latest upgrade to a mobile app that originally began with simple photo-sharing capabilities. To make payments possible, Snapchat partnered with Square, a payments company that recently launched a similar feature to work for email and its own mobile app. Snapcash is available for Android users, with an iOS release coming soon.
The Snapcash feature is designed to read and detect when users want to send money. “Users simply type out the dollar amount they’d like to send as part of any private message — for example, ‘here’s $5 for lunch.’ The app recognizes the ‘$5’ text and a green payment button illuminates next to the keyboard,” reports Re/code. Users can then simply tap that button to confirm the transaction and send the payment.
Given the sensitive nature of personal finances, Snapchat has appointed Square to collect and secure user’s bank account and debit card information. According to a Snapchat representative, “When a user signs up for Snapcash, they’ll be creating a Square Cash account at the same time and agreeing to Square’s terms of service.”
Snapchat’s decision to delegate financial security to Square may be in part because of Snapchat’s previous problems with user privacy and attempted leaks. The most recent incident took place in October when a third party app successfully duplicated Snapchat’s API and leaked user photos.
While details of the partnership remain undisclosed, Re/code predicts that Square is likely to earn a small fee per every Snapcash transaction in addition to the heavy exposure that the company is expected to gain as users begin signing up.
Snapchat continues to expand its offerings. Earlier this year, the company launched its first advertisement using its Snapchat Stories feature.
For additional information, check out the 2-minute Snapcash promotional video.