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Snapchat to Let You Send Money to Friends, Thanks to Square

Snapcash allows users to send each other money via private messages on Snapchat.

Snapchat via YouTube

Snapchat unveiled Snapcash on Monday, a new payments feature that allows users to send and receive money from friends through the app’s private messaging service, CEO Evan Spiegel told Re/code.

The new tool is powered by payments company Square, which operates its own similar service called Square Cash that allows people to send and receive money through its Cash app or email.

With Snapcash, users simply type out the dollar amount they’d like to send as part of any private message — for example, “here’s $5 for lunch.” The app recognizes the “$5” text and a green payments button illuminates next to the keyboard. Users can then tap that button to activate the payment, which is completed once the message has been sent.


As Snapchat’s partner, Square will be responsible for storing all user bank and debit card information, Spiegel says, meaning none of the personal financial information from Snapchat users will reside on Snapchat servers. When a user signs up for Snapcash, they’ll be creating a Square Cash account at the same time and agreeing to Square’s terms of service, according to Square spokesperson.

This may appease some users concerned with Snapchat’s security. The app was hacked on New Year’s Eve when account names and phone numbers were matched up online for almost five million users. Then in October, thousands of private Snapchat photos were leaked online, including pornographic images. That leak was actually from SnapSave, a third party app that had duplicated Snapchat’s API without permission. Many users still criticized Snapchat, claiming the company’s API should have been tougher to replicate.

The automatic creation of new Square Cash accounts may be the greatest benefit for the payments startup, which will (in theory) collect payment data from a slew of new users. It’s likely not the only benefit, however. Square’s logo will appear within the app when a user is introduced to Snapcash for the first time. And while both companies declined to comment on the terms of the deal, it’s likely that Snapchat is paying Square a small fee for each transaction it processes.

Despite the update, it’s unclear if payments will be a core part of Snapchat’s business moving forward. (Snapchat just rolled out its first advertisement, so the business strategy is still very much in the air.) Spiegel says that Snapchat doesn’t intend to compete on a payments front with services like Venmo or PayPal, and certainly not against partner Square. Instead, he sees Snapcash as an update that simply benefits his users.

Of course, Snapchat will offer competition if Snapcash expands. Mobile payments is growing into a big business, and Snapchat has a number of avenues it can explore moving forward. At launch, Snapcash is only available for U.S. users 18 and over, and payments must be made using a Visa or MasterCard debit card. Spiegel wouldn’t share where the product is going, but it’s likely Snapchat will expand beyond those constraints as it learns how people are using the service.

Snapchat doesn’t experiment with updates using small test groups, so Snapcash has only been used internally to date.

The idea for Snapcash came in May of 2013 when Square CEO Jack Dorsey sent Spiegel $25 via email while testing out Square Cash. (Square Cash launched publicly last October.) The duo had stayed close after being introduced by Peter Fenton, a Twitter board member and general partner at Benchmark Capital, and Dorsey wanted to show off the product.

When he received the email, Spiegel was blown away and responded immediately. “Okay this is actually genius,” he wrote.

Spiegel was more than just impressed. He wanted to build something similar for Snapchat, and he wanted Jack to help in the process.

“That to me, when I look back over the last couple years, was the most fun and exciting product [I’ve seen],” Spiegel says now. “I really thought that was cool. I wasn’t expecting that from email.”


The partnership represents a big step for Snapchat, which has partnered with brands in the past for content purposes (like Snapchat Stories), but hasn’t opened its app in this way for any other tech companies.

It’s also a big opportunity for Square, which has never offered Square Cash as a service within another app before Snapchat. Assuming all goes well with Snapcash, it seems likely that Square will look to build out Square Cash with other partners moving forward.

When asked about this possibility, a Square spokesperson said: “We’re always exploring ways to make it easier for customers to send and request money, but we don’t have anything to announce at this time.”

Snapchat, meanwhile, appears to be in an exploratory phase, seeking different ways to expand on its traditional ephemeral photo-sharing service. Digiday reported that the company is meeting with media companies like Buzzfeed and Vice to create a Discover section within the app to feature media content like music and video.

Snapcash is available as part of an Android app update Snapchat rolled out Monday. An iOS version of the product will be pushed out soon, according to a company spokesperson. UPDATE: Snapcash is now available on iOS.

The company also created this YouTube video to accompany the launch. It’s very… well, just watch it.

This article originally appeared on

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