Snapchat Steps into Mobile Payments with Snapcash

Mobile payments has proven to be big business, and with big business comes a host of competitors eager for a piece of the market.

Snapchat is one of the latest such entrants into the field, and its new service, Snapcash, looks to not only make it easier to make mobile payments but also particularly convenient thanks to its social media connections.

Snapcash is actually built right into Snapchat proper, so people can now not only send text, photos and video that disappear following viewing, but users can also send money via text message. All a user needs to do is type a dollar amount into said text message, and from there, the app recognizes the payment and offers the user a payment button. Pressing the payment button activates the payment system and completes the transaction accordingly, assuming the user has previously entered either MasterCard or Visa debit card information.

The actual payment infrastructure itself, meanwhile, is offered by Square, so Square’s reliability comes into play to offer a powerful payment package. Better yet, that payment information mentioned previously is actually kept with Square, so there’s no need to be concerned about the level of security around that data.

The combination of Square and Snapchat bringing Snapcash into play makes for a secure, easy-to-use payment mechanism that’s also a little fun. That combination of factors makes for a particularly unusual competitive edge for Snapcash, and one that might well allow it to gain ground in a hotly-contested market space. Interestingly, Snapchat’s CEO, Evan Spiegel, noted in an interview with Re/Code that Snapcash was never really meant to compete with the major names in the market like PayPal, or Venmo. Basically, Snapcash was meant to put a little extra punch in Snapchat, and in that, it may well do nicely.

The disappearing messaging service was recently valued at $10 billion dollars thanks to its 100 million monthly users, and its popularity among Millennials and younger - and that means a valuable demographic for advertising dollars.

Essentially, Snapcash is counting on having its own market in native Snapchat users, and there’s no reason to believe that Snapchat users wouldn’t have an active interest in taking on Snapcash. While there may not be a huge market for such a thing, it would mean some extra cash going to Snapchat, and in an environment where there are both a lot of social networking systems and a lot of mobile payment systems, combining the two poses a terrific opportunity to get Snapchat a leg up in the field.

It’s not the first time we’ve heard of such a phenomenon, of course, and it’s enough to make one wonder if this is the future; Apple Pay for Apple buffs, a Twitter or Facebook mobile payment system for fans of those social media systems, and so on. Still, this could be an interesting new breakdown of the market, and will bear watching for some time to come.