Snapchat has been offering the opportunity for users to pay each other through its Snapcash feature, which is a rebranded version of Square’s Square Cash product. It didn’t achieve the intended results, so even as Snapchat evolves to a more commerce-based site, they decided to drop their P2P capabilities. From TechCrunch:
Snapcash may have become more of a liability than a utility. With apps like Venmo, PayPal, Zelle, and Square Cash itself, there were plenty of other ways to pay back friends for drinks or Ubers, so Snapcash may have seen low legitimate usage. Meanwhile, a quick Twitter search for “Snapcash” surfaced plenty of offers of erotic content in exchange for payments through the feature. It may have been safer for Snapchat to ditch Snapcash than risk PR problems over its misuse.
TechCrunch tipster Ishan Agarwal provided the below screenshot of Snapchat’s code to TechCrunch. When presented with the code and asked if Snapcash would shut down, a Snapchat spokesperson confirmed to TechCrunch that it would, explaining: “Yes, we’re discontinuing the Snapcash feature as of August 30, 2018. Snapcash was our first product created in partnership with another company – Square. We’re thankful for all the Snapchatters who used Snapcash for the last four years and for Square’s partnership!” The spokesperson noted that users would be notified in-app and through the support site soon.
Is this the beginning of a trend? Will P2P transactions consolidate to the current leaders Venmo, Pay Pal and Zelle brands? Too early to tell, but securing consumers’ payment credentials and handing transaction disputes is hard work. If P2P payments aren’t central to a business, it might be better to step away as Snapchat has done.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
