It's a big year for mobile payments, and Snapchat is the latest to unveil yet another way for mobile users to send and receive money instantly.
Unlike other mobile-payment processors, Snapcash relies solely on Snapchat's chat feature and Square's credit card processing technology. Here's how Snapcash works and what it means for merchants. [27 Ways to Accept Mobile Payments]
How Snapcash works
Snapcash is meant to be a fast, easy way to send money among users. Simply swipe into the receiver's chat window and type a dollar sign to go into Snapcash mode. Enter the amount next to the dollar sign, and hit the green button to send the funds.
Receivers have 24 hours to accept the funds — which go directly into their bank accounts — or it is refunded to the sender.
To send money, users will need to save their debit card information into the system. Snapchat doesn't handle or store the information, however, which should be a sigh of relief for those who are worried about their data in light of a recent massive security breach. Instead, all financial data and processing are managed by Square, using secure servers and secure networks that offer layers of protection, payment card industry (PCI) compliance and fraud monitoring capabilities.
[For a side-by-side comparison of the best mobile credit card processing services visit our sister site Top Ten Reviews.]
What Snapcash means for merchants
Snapcash has the potential to change the way people shop both online and offline. Although there are several P2P payment systems that already exist — Google Wallet, Venmo, PayPal and Square's own Square Cash, to name a few — they are all strictly financial solutions. Snapcash, in contrast, is the first platform that has been able to integrate a mobile payments system within an existing app and social media.
Here are some ways merchants can use Snapcash by combining social media selling with mobile payments technology:
- If you're an Instagram seller, you can take the sale to Snapchat instead of going back and forth with emails and relying on a third-party payment processor. Use Snapchat to send buyers additional photos, and have them complete the purchase instantly by sending you Snapcash.
- Are you an Etsy seller, or do you have an online store but wish to sell offline? If you don't have a mobile credit card processor, Snapchat users can easily pay you with Snapcash in person.
- Snapcash also can be used to pay for services and products sold in-store, making transactions more convenient and seamless for existing Snapchat users by eliminating the hassle of signing up with a third-party payment processor.