Snapchat, the photo-sharing app, has announced that it will be rolling out a peer-to-peer (P2P) payments feature called Snapcash that will allow users 18 years and older to enter their debit card information and later use it for transactions with Snapchat friends.
This is how it will work:
- A Snapchat user can type the message “$25 for dinner” to a friend of their choice.
- The app will recognize the dollar symbol and turn the yellow “send” button into a green Snapcash button.
- When the user presses the green button, the money will be directly transferred to the contact’s debit card and processed by Square Cash, the well-known mobile payments company, in one to two business days.
This newfound relationship between Snapchat and Square is proof that it is possible for any business or corporation to get into the P2P or even B2B payments industry.
In an industry so heavily regulated, to offer this kind of service Snapchat needed a regulated partner with robust and proven payment capabilities—in this case Square.
Though the messaging service continues to be one of the most-downloaded photo and video apps, we will be keeping an eye out to see if Snapchat begins to amp up its security now that it is stepping up to the plate with other more established P2P payments apps, like Venmo and PayPal.
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