Snapchat today announced the arrival of a new feature for its popular messaging app: the ability to send money to friends. In a partnership with payments firm Square, 'Snapcash' will allow people to enter their debit card payment information securely and message their friends a dollar amount to be directly deposited into the recipient's bank account.
With peer-to-peer payments, Snapchat is joining a crowded field that includes
Based on Snapchat's announcement, it is unclear what kind of deal has been struck between the two companies, as it doesn't appear that users will be charged for the service. Snapcash is likely built on top of Square's own money-sending service called Square Cash that launched about a year ago. Normally Square charges business owners that accept payments through their Square Register platform a 2.75 percent of every card swipe. Square Cash, which is more like a digital wallet than a company cash register, is free to use.
Square and Snapchat are also going to have to overcome questions about the sanctity of users' financial information. Snapchat recently suffered a hack into its user photos, facilitated by a third party app that isn't run by Snapchat, and some users are still wary about handing over private information to the app. But Snapchat in its announcement said that "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."