In another move to transform itself from high-value startup to revenue generator, Snapchat on Monday announced Snapcash, the company’s entry into the ever-growing e-currency space.
The new service lets adult Snapchatters in the United States send money to friends without a charge the same way they would send a private message.
Snapchat created Snapcash in partnership with credit-card processing startup Square. Business Insider reports that under the terms of the arrangement, Snapchat will handle the messaging and Square will run financial transactions.
In a blog post, Snapchat explained why it entered the partnership with Square: "We set out to make payments faster and more fun, but we also know that security is essential when you’re dealing with money. Square has a ton of experience in this area and our teams have been hard at work to make Snapcash a great experience for everyone. For now, Snapcash is available to Snapchatters in the United States who have a debit card and are 18 or older.
"The product you’re seeing today is fast, fun, and incredibly simple. After you enter your debit card, it’s securely stored by Square, who will swiftly process your payment and send cash directly to your friend’s bank account. Just swipe into chat, type the dollar sign, an amount (e.g. $11.25), and hit the green button."
To address security concerns that have dogged the messaging app, Snapchat said it will be "refreshing" its privacy policies as part of the Snapcash launch. While the company hasn’t specified what the enhancements will comprise, it did specify that Square, not Snapchat, will store the Visa or Mastercard information, and users will be limited to transferring $2,500 weekly.
A reported 26 percent of cell phone owners age 18 to 29 say they use Snapchat, and everyone who uses Snapcash will automatically become a Square member. The partnership allows Square to build a relationship with millions of Snapchatters.