To use the new service, Snapchatters just have to enter their Visa or MasterCard debit-card number on their smartphone, where the account information is held by Square. Then they swipe into chat, type a dollar sign ($) an amount and hit a button to send the cash directly to a friend’s bank account.
Snapchat is promoting the new service with a very, ah, interesting ad, which begins with two teenagers using the service and quickly segues to musical spectacular featuring a chorus line singing, “Swipe three fingers to make it rain/paying people back will never be the same/the dollars float down to their bank account/no longer carry singles in large amounts.” I guess Snapchat assumes that users won’t be put off by the fact that the people handling their money are all high —- millennials are cool like that.
Of course, the introduction of a mobile payments service also positions Snapchat to get into e-commerce as well, putting it into competition with services like Venmo, which handles both peer-to-peer and commercial payments — and for some inexplicable reason tells your friends when you paid for something.
Probably not coincidentally, today Venmo moved to make its sign-up and log-in processes easier, by allowing users to link the app directly to their online bank accounts, with the same ID and password they use for those accounts. That means users no longer have to find their checkbooks (OMG) and figure out which part of their account number is the routing information (double OMG). Another new feature allows them to send messages “at” people a la Twitter.
Mobile payments of all types are set to surge, according to Forrester, which forecasts the total volume will almost triple from around $50 billion this year to $142 billion in 2019. Within the latter figure, in-person mobile payments (for example, at retail checkouts) will come to $34 billion, or 24% of the total, up from just $3.4 billion today. Peer-to-peer payments will also more than triple from $5.2 billion this year to $17 billion in 2019. Most payments will still be made remotely for ecommerce and services.