P2P Rush Continues as Snapchat Debuts Transfer Feature (Nov. 18, 2014)
Popular social messaging service Snapchat is the latest tech provider to throw its hat into the P2P money transfer ring. The company this week unveiled a new feature called Snapcash, which enables users to send and receive money within the Snapchat messaging app. To send funds, users type in a dollar amount when composing a message and tap a special payment button. The actual payment process is handled by Square, which co-developed the service with Snapchat. When signing up, users must create a Square Cash account and link a MasterCard– or Visa-branded debit card to fund and receive transfers.
Snapchat is positioning the service as an added value for its own users, rather than competing with established money transfer services like PayPal, Venmo and Square Cash itself, Snapchat CEO Evan Spiegel told Re/code. The service is available now for Android devices and an iOS version is coming soon. The first clue that Snapchat was considering a move into payments came in July, when the company filed a pair of patents for technologies related to electronic funds transfer.
Money transfer has become a hot area, with a number of new services coming to market over the past several months as payment providers seek to stake out turf in what could become a major vertical. Social networks have taken note, too. Last month, plans came to light that Facebook could be preparing to add a money transfer function to its popular Messenger app—and the company already is licensed as a money service business (MBS) in most states.
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