Snapchat seems to have beaten Facebook to the punch. After we spotted the telltale signs earlier this year, the photo chat messaging app has just partnered with the payments tech company, Square, to launch Snapcash — a feature that enables its estimated 100 million active monthly users to send money to each other.
No ad to show here.
Look no further than Snapchat’s really bizarre introduction ad for Snapcash:
Apparently inspired by Square Cash, the product is meant to be “fast, fun, and incredibly simple”. For those who were worried about security concerns, Square will store your card details and will also be responsible for processing the payment.
The integration is pretty seamless — after you’ve uploaded you card details, swipe into chat and type the dollar sign as well as the amount. You then just tap the green button to send, and as the embarrassing song goes, “The dollars float down to their bank account.”
Snapcash is available to Snapchat users in the US who are older than 18, which somewhat limits the service to a rather small demographic given that over 70% of its users are younger than the age of 25.
Snapchat seems to be finally putting its money where its mouth is. The company boasts an incredible valuation of US$10-billion and has only a last month started introducing targeted ads on its platform.
Snapcash opens up yet another interesting revenue stream whereby the photo messaging company can charge users a small transaction fee, which will probably be shared with Square.
As Techcrunch points out though, the true value of Snapcash doesn’t necessarily lie in transaction revenues as much as it does in valuable user data. Getting access to users banking details is that one sliver of information Facebook likely doesn’t know about you.
Read more: Facebook Messenger could enable you to send money to your friends
By gaining access to users’ legitimate banking details, location, interests and habits, Snapchat could enhance its targeted ads which will be more relevant to the user as well the brands. As reiterated by Square Payments’ Terms and Conditions page:
We may allow third parties to serve advertisements in connection with our Services and to provide analytics services. These third parties may use cookies, web beacons, and other technologies to collect information.
This announcement comes at an interesting time when Facebook (which Snapchat has turned-down before) has also been suspected of releasing a peer to peer payments feature for its messaging app. Watch this space: the Big Blue versus the Big Yellow.
