Today Snapchat rolled out a pay-your-friends feature called Snapcash, powered by Square. Using the ephemeral text chatting feature of the app, you can type in the amount you want to send with a dollar sign. The app recognizes it and transfers money to your friend (once you’ve authorized the Snapcash service in the app).
This is Snapchat’s first big experiment with becoming a full-fledged messaging platform, much like China’s WeChat or Korea’s KakaoTalk. These apps attracted their users with messaging first, and then introduced other features like e-commerce shopping, games, banking, celebrity communication, and brand promotions.
A fledgling peer-to-peer payment system like this is a big first test for Snapchat. It not only will help it to develop a payments process, it will also allow it to gage consumer comfort with sending money through the app. That’s a fundamental building block for other features, from product sales to gaming to banking, that Snapchat could want to…
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