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Now Chat and Send Money in the same App, Thanks to Snapchat and Square Cash

Snapchat is integrating P2P (peer-to-peer) payments into its messaging app. The company has added a Snapcash payment option to its app as part of a deal with Square Cash. Now Snapchat users can add a debit card, type a dollar amount in the text-chat interface and hit the pay button to send money to their peers. The new feature is currently available on Android platform and would arrive for iOS users later.

Earlier this year, Snapchat had filed for two trademarks related to payments, as was reported by TechCrunch. Specifically, the two trademarks were:

  • Computer application software for processing electronic payments to and from others that may be downloaded from a global computer network.
  • Electronic transfer of money for others; providing electronic processing of electronic funds transfer, ACH, credit card, debit card, electronic check and electronic, mobile and online payments.

These trademarks clearly suggest that Snapchat was looking for add-on payment processing and money transfer capabilities. Apart from current P2P payment capabilities, add-on payment processing features can give Snapchat the opportunity to target e-commerce based transactions and payment settlements with merchants.

On adding your card details in Snapchat, the account details are captured and stored by Square Cash. In Snapchat’s chat UI, as soon as a user types the dollar symbol, the backend algorithm recognizes that the user is trying to pay. The usual send button that you see in Snapchat turns into a green Snapcash button. Money can even be transferred to those who haven’t signed up for Snapchat. Users can sign up and receive the cash within 24 hours or the money gets reverted back to the user who had sent money originally.

Square would be responsible for storing all personal financial information. This would not restrain users from signing up for Snapcash, since Snapchat has had a past of data leaks. Once a user signs up for Snapcash, a Square Cash account would also be created at the same time. This gives Square the chance to add a large array of new users, plus their payments data, into its database. Snapcash is currently available only for U.S. based users who are above the age of 18. This is the first time that Square would be offering Square Cash as a service with another app.

Square is already making forays into the P2P payments space with Square Cash. It had updated Square Cash back in August to allow users to send or receive money simply by using phone number. Last month, it also brought a new feature allowing P2P payments via BLE (Bluetooth low energy). Now Snapchat is giving a broader platform to Square Cash and the opportunity to target Snapchat’s 100 million monthly active users. This could certainly give Square Cash an opportunity to hit back at other P2P services like Venmo.

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