Messaging app Snapchat has launched a money transfer service, called Snapcash, which it developed in partnership with mobile payments specialist Square. The service, available in the U.S., allows users to send cash to a contact’s bank account via Snapchat message. In order to use it, customers must have debit cards and save their payment details with Square, which will then process the payments.
We have observed the proliferation of mobile-device-based money transfer systems in many markets. This one appears to be targeted to the youth demographic in the U.S., which accounts for most of Snapchat’s users. By integrating mobile money with this popular social media platform, Snapchat and Square may well be able to develop a new market for this type of payment and thereby derive some appreciable revenue.