Earlier this week Snapchat announced that it would be launching a brand new service that allows users to send money to other users of the messaging app. The new feature, known as ‘Snapcash’ has been created in partnership with the payment-processing company Square, which offers it’s very own stand-alone payment app called Square Cash.
As it currently stands, the new payment service will only be available to Snapchat users in the United States who are over eighteen years old.
Snapchat has recently unveiled plans to offer a new payment service with the help of Square Cash to users over the age of 18 in the United States.
How will Snapcash work?
If you have used Snapchat before you will know that it is a messaging app that allows you to share videos and images for a few seconds, after which they ‘disappear.’ The new Snapcash service will allow users to enter their banking information into Square Cash’s severs so they can send payments to their friends via private messages on Snapchat.
In order to send a payment, users will simply need to type the dollar sign into a private message and then follow it up with the amount they would like to send. The app will then recognise that the users want to send a payment and identify the amount they would like to send. From here, a green payment button will appear which users can tap to complete the payment.
The payment system is relatively similar to other mobile payment services on the market including Venmo and PayPal.
Watch the video below to see the Snapcash service in action.
Snapcash security concerns
Despite the fact that Snapchat has said that users personal financial information will not be stored on Snapchat’s servers, the new service has already sparked a number of security concerns.
Recently Snapchat has experienced a number of high profile security breaches, so it is understandable that users are wary of this new service. First the app had over 4.6 million of its user accounts compromised by hackers and then in May they had to settle a case with the US Federal Trade Commission over allegations that the company misled users over data collection.
With this in mind, Snapchat has been quick to address security concerns, explaining that users who sign up for the payment service will be required to create a Square Cash account and that they will be working closely with the Square team, who have years of experience in this area.
Getting a better picture of users
Media experts believe that this new payment service offered by Snapchat and Square Cash is their way of forming a more complete picture of the app’s users. Previously, Snapchat was only able to gather basic data about its users such as their username, contacts, IP location, age (voluntary), phone number and the people they follow. Snapchat can only hold this information for a limited time, making it difficult for them to monetise the messaging service.
However by partnering with Square Cash and offering this new service they will be able to get a better idea of who their users are and will therefore be able to created better-targeted ads that are relevant to their users and help advertisers to achieve a better ROI.
It will certainly be interesting to see how Snapcash goes down with Snapchat users and whether the brand will decide to roll-out the app further afield to the UK or elsewhere in the world. What is clear is that Snapchat is working hard to expand the app beyond its core in an aim of branching out into advertising and live events.