Snapchat promises ‘incredibly simple’ mobile payments service
Snapchat is launching a mobile payment service that lets users send money to one another as part of wider efforts to start generating revenues through advertising and other services.
Users can transfer “Snapcash” to each other once they link their debit accounts to their profile and then enter the amount into a chat, a promotional video explains (see above). People could use the messaging app to pay for a restaurant meal or for drinks at a bar should advertisers already on the social network use the feature.
The peer-to-peer service is handled by Square, which owns a similar money transfer app and stores and processes the payments between different bank accounts.
The launch of “Snapcash” comes at a time when Snapchat’s wider offering is already under scrutiny for security concerns. Phone numbers and user names for as many as 4.6 million Snapchat users were reportedly stolen from the service earlier this year, an incident it apologised for and vowed to fix.
The launch is Snapchat’s latest move to make good on its $10bn valuation. Last month, it began serving ads but promised that they would not be “creepy” or “targeted” so as not to scare away the 14- to 34-year-old fanbase it is trying to monetise. Companies including McDonald’s and Unilever have been circling the social network for the past 18 months but their investment to date has been limited.
Ecommerce is tipped to be the next key battleground for social networks as they look to evolve their offerings beyond instant messaging and shareable content. Apple has just launched its NFC-based Apple Pay point-of-sale service, while Twitter announced its first commerce product, a “Buy” button, in September. In the US alone, mobile payments are predicted to nearly triple to $142bn by 2019, an increase on the estimated $52bn this year, according to Forrester.
“Snapcash” is available to all US users but it is likely the service will expand as Snapchat has hinted will happen for its fledgling ad service.