Supporting Local Payments on a Single Global Platform





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Snapcash is a Window into What Users Don’t Want Snapchat to Know


November.20.2014 0 Comments

snapcashReactions to the announcement of Snapchat’s new payments service Snapcash ran the gamut from “the future of payments” to, well, a way to pay people for sending nude pictures.

Spoiler: We’re leaning more toward the first option here.

Snapchat isn’t processing any payments — it’s letting Square do that. Square Cash, which launched in October 2013, has received praise for its clean design and ease of use, but didn’t exactly shake up the world with its standalone app. However, Square is one of millennials’ most trusted brands and the one they would most like to see start a retail bank, which is the kind of gravitas Snapchat, with its history of hacks and general air of cheerful disregard for the serious — see its video for Snapcash below — can surely use.

Here’s Owen Williams of The Next Web‘s take:

Instead of using a third-party app, payments will be baked into existing first-party social networks seamlessly, so that users never need to register for a new app or account, but instead can send payments instantly to anyone who’s already on the network. All the recipient will need to do to get paid is add their bank details.

Snapcash is the first to do this in a meaningful way. The company has removed all friction from mobile payments and makes it as simple as getting down to the act of actually sending cash. By launching this feature, the company has turned on payments for over 100 million users.

Yes, yes and yes. Williams goes on to consider Facebook Messenger, which would be a game-changer in payments, but as pointed out here, Zuck and Co. seem to have little interest in payments except as an adjunct to Facebook’s gargantuan advertising business. Following the Snapchat model of partnering (or buying) rather than building a solution would make sense — and what a score that will be.

More common reactions to Snapcash run more like this:

So the number one app that people use while they are intoxicated now has instant access to your bank account? …. ya no thanks #snapcash

— Riley Hilliker (@Hillikopter_7) November 18, 2014

Ain’t about to give my bank account info to an app that makes things disappear in ten seconds. #snapcash — Tim Carroll (@TimCarroll9) November 18, 2014

Sexting just got a little more expensive. Thanks #snapcash ! — Vinny Vaillancourt (@vtothepowerof2) November 18, 2014

The truth may be more like what Bradley Leimer, head of innovation for North America at Santander, hit on:

So SnapCash is really an identity play for ads and revenue for SnapChat and an ecosystem play for large mobile base for Square. Got it. — Bradley Leimer (@leimer) November 18, 2014

Square Cash has always been about widening its userbase, so this partnership counts as a major score. (Here’s Brian Roemmele explaining the nitty gritty of Square Cash on Quora, for the curious.) And Snapchat can certainly glean more data from its users and deliver targeted advertisements, even though Square is handling the funds.

Snapchat’s userbase does not generally have deep or longstanding banking relationships (though Square Cash’s service is built mostly on debit cards.) So while this is a monetization play — Snapchat already has ads — it’s also going to deepen users’ relationship with Snapchat and potentially take a bite out of standalone payment apps like Venmo, whose social aspect looks lightweight by comparison.

Square Cash may well see more implementations like this.

TechCrunch revealed some code in the Android Snapchat app that shows an identity verification check. This means, though Snapchat can learn more about its users behind the scenes. But the beauty is Snapchat doesn’t have to ask for anything, it will just… happen. And what it learns won’t disappear in ten seconds.

Trust in Snapchat is low. Over time, Snapcash may help change that.