Snapchat joins Square to offer payments feature

Snapchat, the messaging app that lets users send texts and photos that disappear within seconds, has launched a money transfer feature.

Through the new “Snapcash” feature, the app’s millions of monthly users can enter their debit card information and send money to a friend.

Sounds like a fool-proof plan to me. Did I mention the Snapchat data breach in 2013 that led to data on 4.6 million users being exposed? The breach that Snapchat for months ignored warnings about?

Then there was the deal in May with the Federal Trade Commission, which settled charges with Snapchat over allegations that the app maker had deceived consumers with assurances that their messages disappear, and had misled users about other security practices.

For the new Snapcash service, Southern California-based Snapchat has teamed up with San Francisco payments company Square; the security of the debit-card numbers will be handled by Square. The deal also gives Square access to Snapchat’s users, who send more than 700 million disappearing “snaps” a day, Bloomberg reported.

To use the payments feature, users open the Snapchat text-chat and type in a “$” followed by the dollar amount they want to send. A green Snapcash button appears and the user taps it to deposit the money into a friend’s account. If the payment isn’t accepted within 24 hours, the cash will be refunded, the company says.

Users must be 18 and older and have a debit card to be able to use the payments feature. Some have suggested that Snapcash is a primer for Snapchat to move into retail and ecommerce payments.

Oh, and don’t miss the bizarre new ad for Snapcash, a Broadway-style musical full of twirling dancers and glitzy costumes adorned with dollar signs.

In other payments news, Square on Tuesday introduced gift cards as part of its Register service, which allows merchants to sell, redeem and track gift cards through the Square Register app. When a customer purchases a gift card, the funds are automatically deposited into the merchant’s account the next business day; the cards cost the merchant $1.50 each. The gift-card program is the latest in a series of merchant programs Square has rolled out in an attempt to stay relevant in the competitive payments space.

 Image: Screen grab from Snapcash advertisement

 

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