Introducing Snapcash

http://blog.snapchat.com/post/102895720555/introducing-snapcash

by kevando • 12 years ago

269 193 12 years ago

blog.snapchat.com

kevando3• 12 years ago

I love this because it looks just as simple as Venmo, but I don't need to convince people to download the app.

driverdan• 12 years ago

You don't need to download anything to use Venmo, you can use their website.

smackfu3• 12 years ago

I think "download" was a shorthand for "sign-up". Signing up for a payments service is pretty friction-ful.

minimaxir• 12 years ago

Facebook + Paypal vs. Snapchat + Square.

That's a pretty fair fight.

crazypyro7• 12 years ago

I think Facebook + Paypal has huge advantages, so I can't tell if you are being sarcastic or not.

dang• 12 years ago

Also https://news.ycombinator.com/item?id=8620320.

angryasian• 12 years ago

so now people can pay for sexting/nudes, actually sounds like a good use case

edkennedy• 12 years ago

I predict that use and paying a local drug dealer will be the primary use in the demographic they go for.

crazypyro7• 12 years ago

I can't imagine any drug dealer would want to put their transactions into a bank account, at least if they sell anything more than casually.

untog5• 12 years ago

This kind of thing will be the death of Venmo, and makes me wonder why they haven't moved faster. An app that already has your social network will have more success adding friend payments than your friend payments app trying to add a social network.

kevando3• 12 years ago

I never had an issue finding people on Venmo. It was more the barrier of getting people to download Venmo, so I agree this will probably crush venmo.

free2rhyme2143• 12 years ago

Exactly. Removing barriers to entry is huge for gaining adoption and traction.

I would expect similar functionality in other messaging apps soon.

untog5• 12 years ago

Finding people that are already on Venmo, sure. But I meant that when you start a new social network you have zero users, and that's a problem.

smackfu3• 12 years ago

OTOH, a payment app can grow pretty organically. It doesn't matter that I'm not "friends" with my friend Joe on Venmo if I don't need to send him money.

unclebucknasty• 12 years ago

Is there really that much interest in paying friends electronically? I have just never had much reason for paying friends or accepting payment from them.

Seems like this is more about paying strangers, including possibly retailers.

0x0• 12 years ago

Does it work outside the US?

rasmusrygaard• 12 years ago

Looks like the answer is no:

"For now, Snapcash is available to Snapchatters in the United States who have a debit card and are 18 or older."

steakejjs• 12 years ago

Seems like this might impose on Clinkle quite a bit? Who is going to download clinkle when they can do the same thing from snapchat?

Seems neat to me, and pretty unexpected. One scary thing is just how bad a lot of passwords are for mobile applications. I'm sure it is even easier to brute force passwords on mobile and send a snapcash to yourself

Igglyboo2• 12 years ago

https://twitter.com/mrgan/status/384780273721696256

—"I'd like to, uh… "pay with clinkle."

—"Excuse me?"

—"Uh, pay with… clinkle?"

—"Do you need the key to the restroom?"

—"Pay… with… clinkle"

untog5• 12 years ago

Who is going to download clinkle

Let me stop you right there...

josephpmay• 12 years ago

People are already using Venmo. Nobody is going to switch to Snapcash or Clinkle.

derwiki2• 12 years ago

But Venmo hasn't won. Outside the Valley, I don't know anyone who uses it. (although, mostly the same with SquareCash)

chipgap982• 12 years ago

I'm interested to see if people start using this over venmo. Everyone already has snapchat, so the only thing users have to do now is put in their credit/debit card.

jmuguy• 12 years ago

I wonder if this is replacing Squarecash?

chipgap982• 12 years ago

I think this is being built on top of square cash.

jnks• 12 years ago

Square loses something like 25 cents per Square Cash transaction [1], and now they want more transactions? I wonder if Snapchat is paying those fees, and if so how they think they're going to make that money back from their users.

[1] http://qz.com/248572/squares-search-for-a-viable-business-mo...

jpalacios• 12 years ago

Given they will have the debit card saved, perhaps Snapchat is thinking it will be much easier to offer products to their users in the future.

smackfu3• 12 years ago

Yeah, it's odd. Competitors like Venmo rely on not putting the money directly into the recipients bank account until they cash out. So they can make a little interest money off that directly, and more importantly, any transactions that come off of someone's balance are free since they are just moving money around inside their computers.

arasmussen• 12 years ago

"After you enter your debit card, it’s securely stored by Square, who will swiftly process your payment and send cash directly to your friend’s bank account."

That first comma makes that sentence so hard to read..

jfernandez• 12 years ago

Maybe I'm crazy (and admittedly a little old) but I like the separation of my social and financial software "zones". I know there are tremendous reasons to incorporate this directly into a social product but I just can't shake that feeling.

Am I alone in this or does everyone here on HN embrace this with arms wide open for actual use (vs experimenting or playing around with new products)?

Vraxx4• 12 years ago

I don't think people who desire this separation are the target audience of this update. It seems to be a pretty solid business move for both parties. Snapchat has a feature that is (at least in my experience) commonly used between friends just like their app is, and Square continues to build it's user base and trust as a mobile payment system. Win-win.

I've been using square cash for a while and I've been quite pleased with it. Now, assuming I can use square cash to send money to people with Snapcash, it'll be even easier to convince others to adopt this payment method, making it even more useful.

untog5• 12 years ago

But what about social financial software?

Don't get me wrong, I don't want my online banking in Snapchat. But sending money to friends is a very different action - it's inherently public, for one.

austinhutch• 12 years ago

Public? It is a private transaction between two parties. This is why I don't understand Venmo's interface that tells me about transactions that I'm not involved in. I always set my payments to private, admittedly it does make for an interesting feed to browse for those who transact publicly.

dcre• 12 years ago

Plenty of people will feel the same way, but I suspect the proportion is much lower among people under 25. Pretty soon people will probably use software that integrates social and finanicial so often they won't even think of it as anything special.

baby• 12 years ago

I think their long term objective is to make it in a separate app. Snapchat doesn't have any logs (it's against its principles) and you would want to have some kind of logs if you're sending money. But launch a product through your already successful product and make it something apart when it gets traction.

david_shaw• 12 years ago

I think the primary challenge is convincing users that it's secure. Snapchat has a relatively poor reputation in security (whether that's deserved or not), and everyone I know just uses Venmo. Venmo has Facebook integration, so if you're Facebook friends, it's really easy to send money.

It seems like integrating into a platform that's supposed to be ethereal is a weird fit, but who knows -- maybe it'll catch on.

free2rhyme2143• 12 years ago

I disagree. The primary users of Snapchat aren't worried about security.

eli• 12 years ago

Even with their money?

serve_yay• 12 years ago

They also aren't currently sending each other money. I hate to be a naysayer to what I think is a pretty cool product, but Snapchat's terrible security reputation is well-deserved. But also this isn't very much differentiated from sending money with Gmail, Square, etc.

Vraxx4• 12 years ago

Even if the users of snapchat were particularly concerned with the security of this feature, they alleviated that concern in the post by stating that all of the financial security will be handled by Square which is building it's reputation of security in mobile payments.

hemancuso• 12 years ago

I'd like to see a venn diagram of Snapchat users and people who actually know who/what Square is

pencilo• 12 years ago

"Relatively poor" is letting them off easy, comically incompetent would be closer to the truth. Hopefully Square doesn't trust data from Snapchat.

Lucky for Snapchat their users and potential investors don't care about security in the slightest.

a1a• 12 years ago

It's deserved. Gotta give it to them though, pretty bold move considering.

http://www.wired.com/2014/10/the-snappening-is-not-your-faul...

http://www.foxnews.com/tech/2013/12/27/snapchat-ignored-secu...

http://gibsonsec.org/snapchat/index.html

softdev122• 12 years ago

almost every major internet company has security issues nowadays. In my opinion, they should be judged on what the ultimate consequences to the users ended up being.

juanplusjuan• 12 years ago

Seems like Venmo is on a spree to win secure payments in the developed world. It has a few horses in the race:

http://techcrunch.com/2014/11/04/dasher-teams-up-with-venmo-...

At least Dasher has a solid team behind it (former director of mobile at Gilt et al). Not sure how I feel about Snapchat given their security record.

jarek2• 12 years ago

s/developed world/USA/

Signed, Paym user

jvm• 12 years ago

Does Venmo actually have a better reputation for security than Square?

freshfey• 12 years ago

The issue is just, 99% of the people who use Snapchat, probably don't use facebook anymore.

msoad• 12 years ago

That video clearly states that Snapchat is a Los Angeles based company!

ndomin• 12 years ago

50% of snapchat users are under 18 [1]. which this video seems to clearly target (production style is fun, quirky, light hearted, even the actors are young). Yet they require a debit card and the use to be 18+. I guess they are hoping their young users stick with it for a few more years.

[1] http://www.statista.com/statistics/315398/snapchat-user-age-...

derwiki2• 12 years ago

Before Facebook was open to everybody, it was "cool" when you got your college email early and could sign up for Facebook.

notahacker• 12 years ago

In fairness, the other 50% of Snapchat users is quite a large number of people.

I'm assuming their VC-backers are hoping to see traction without waiting for the underage half of the user base to grow up, and are really hoping it doesn't become the fun, friction-free and ephemeral way for that demographic to send their friends funds from their parents' bank account.

giarc• 12 years ago

I actually thought the video was a bit too old for their primary users. The whole glitz and glam of a over produced Vegas style show probably doesn't connect well with 18 year olds. They also had a large abacus, do 18 year olds even know what an abacus is?

otterley4• 12 years ago

Underage nudity and quick cash sending? What could possibly go wrong?

crazypyro7• 12 years ago

....Because that's not possible today with current technology?

edit: I seriously don't understand how you immediately jump to that being the new functionality when sending payments today is as simple as logging into paypal or any numerous other payments sites.... Not to mention the age requirement of 18? This comment is just fear mongering.

enneff3• 12 years ago

I really can't see teenagers setting up a PayPal account in order to receive money for nudes.

I can, however, see someone asking for cash through the very same app that they're using to send nude pictures.

I agree with the GP, this is gonna get interesting.

otterley4• 12 years ago

If you think the age requirement is even remotely effective, you're fooling yourself.

I'm not suggesting that it will be frequently misused -- but even one mishap could seriously harm their business. Law enforcement takes child pornography more seriously than just about any other offense, and money on the table makes it even more serious.

no_future• 12 years ago

How old are you geezers? Do any of you actually use Snapchat/know people who use it? If you did you would know that nobody actually uses it to send nudes because if people get nude photos they would actually like to keep them because surprise surprise - there isn't much you can get done in 10 seconds. The whole sexting thing is a load of drivel concocted by the media because like any good story, it strikes fear into the heart of middle america.

The actual reason it got popular, which a lot of other people in this thread have mentioned as well, is because it was much faster than MMS because the photos were low quality(and at the time I don't think Apple had introduced iMessage), and the photos didn't stick around on your phone after they'd been sent, so it was perfect for sending silly/mundane things that don't need to be preserved.

kin• 12 years ago

I use a lot of different methods to send money to friends. Venmo is by far the easiest, but I still commonly have to ask people to sign up for Venmo.

Snapchat has tons of users. If this is just a new feature built-in, it's pretty easy to tell someone to link their debit card vs. signing up for Venmo and linking their bank account. Plus, the ability to send friends money w/ a picture attachment is kind of fun I guess.

joshstrange3• 12 years ago

I have been a long time user of Venmo and have tried to get a number of my friends on it but most of my friends consider entering their routing/account numbers (if they even know what those are...) into an app and waiting a couple days too much work. They even consider Square Cash too much of a hassle but I can see all of those same friends using Snapcash without issue. I consider Venmo to be the best in this space currently (But come on! Allow using debit cards to receive money already!) and I don't mind the 1-3 day delay in cashing out but I will still enter my debit card in snapchat cause at the end of the day I'm going to use the service that allows me to pay and get paid by the highest number of friends.

kevando3• 12 years ago

I never found that to be an issue getting friends to sign up for Venmo. You don't need to enter any info to accept cash. It was getting them to realize this was cash and not some magic points (because they dont know what venmo is). Snapchat should kill it here because people already understand and trust (for the most part) Snapchat and this is just a new feature - not an entirely new service to learn.

joshstrange3• 12 years ago

Recently I have been taking the approach of "I sent you $15 for XYZ on Venmo if you want it you need to signup" because it's one of the few ways I can get them to do it. I hate to hold their money hostage like that but if I don't there isn't a great way for me to give them money other than paying for them up to what I owe them the next time we hang out (which I am bound to forget).

I agree, I feel like Snapchat/cash will kill in this space due to ease of use.

rokhayakebe• 12 years ago

this is just a new feature - not an entirely new service to learn

Capital.

Balgair• 12 years ago

Whats that old jwz quote: "Every program attempts to expand until it can read mail. Those programs which cannot so expand are replaced by ones which can."

I think there is a corollary too, though I cannot attribute it: "Every social media site attempts to expand until it becomes a bank. Those companies which cannot so expand are replaced by ones which can."

Animats• 12 years ago

Everybody wants to be a bank.

Then they discover how much support effort goes into stopping, or untangling frauds, scams, and robberies.

ThomPete• 12 years ago

SnapCash does not work like Venmo.

drivingmenuts• 12 years ago

Well, if Uber ever becomes a bank, they'll just push that off to the cashier or end user and problem solved.

mvarner• 12 years ago

Ah yes, I definitely want this company with a super-insecure app to handle my money. If they fix Snapchat's API vulnerabilities (from 2013!) maybe I'd consider it.

leeber2• 12 years ago

Hopefully they require a password or a PIN each time you send a message with cash in it.

Otherwise anybody could steal money from you as long as they can get into your phone and open snapchat.

Vraxx4• 12 years ago

Square uses the CVC number on the back of the card as a pin for this currently. It's not the most secure way to handle it imo, but it does stop the general user from picking up a phone and stealing all their money from snapchat (if this feature carries over to snapcash).

leeber2• 12 years ago

Strange, why not just have the user choose a password or a typical 4-digit pin? This would still be way more secure than using the CVC number.

xenophin• 12 years ago

Paid for porn industry will carve out a niche - probably disrupt entire industry. Other users wont touch it. Guaranteed revenue for snapchat though.

dmix2• 12 years ago

I love reading HN's wild speculation about other companies businesses that they come to after reading a headline or two.

Just like the countless comments here, years ago, expecting Twitter to die because it won't make money.

Igglyboo2• 12 years ago

Disrupt which industry, actual porn? Yea that's not going to happen especially since porn is technically illegal most places outside of cali.

UweSchmidt• 12 years ago

Even if you've posted a skeptical comment, do you doubt that one day sending money in a chat app will be totally normal?

When it's there it could be the foundation of hundreds of new business models and applications, and the reason a few household names went the way of Myspace...

guillermovs• 12 years ago

Disappearing cash!

dokem• 12 years ago

What an awkward monetization scheme. Seriously, this is why you passed up x billion dollars? Should've taken the money and tried to actually help the world. Silicon Valley greed and delusion at it's finest.

mikeg8• 12 years ago

I still don't understand how they monetize from this at all. Square cash (which this is built on) has no fees...

rebel2• 12 years ago

Seems like this is laying the groundwork for them to begin offering flash sales. Now they can send you a picture/video of a product and give you a limited amount of time to purchase it at a special price. This won't work without having payment methods on file though, and they won't be able to move worthwhile product without getting a base of cards on file first. That's the only logical business I see evolving from this move.

omfg• 12 years ago

Or pushing the 'cash for pics / videos' .. industry? further. It already exists, now it's even easier.

rebel2• 12 years ago

Although it works for that, I feel like that would be more of a carrot for users so that they can transition to a more reputable business model. They can use that for a short time to get the card data, but then begin selling their own goods etc. I would be surprised if they left it at this considering how young their userbase is. Mixing 'cash for pics' with a userbase predominantly under 18 in a multi-billion dollar business does not sound like a good idea to me.

mmanfrin• 12 years ago

Installed it, none of my coworkers can figure out how to actually send cash, or send anything. Right now it looks like a 'take a picture and add a dollar amount' photo app, except you can't export, can't send, can't do anything but take more app-only picture-expenditure receipts.

e: Looks like it's not actually snapcash -- but another so-named app. Looks like someone is getting a ton of unintentional downloads today.

arnorhs• 12 years ago

For me, it was simply a "snapcash" entry in the settings screen in the snapchat app.

You click it and put in your payment info before you can use the feature.

I'm on the Android app though, I heard from coworkers that the iOS one doesn't have it yet.

expose• 12 years ago

You're correct -- I'm on iOS/iPhone 5 and I don't have the option yet.

MrJagil4• 12 years ago

I believe we in Denmark are very lucky to have one of the best banking systems in regards to keeping up with technological development.[1][2]

Snapcash seems to be the first app that approaches what we've had for a while now: http://danskebank.dk/en-dk/personal/ways-to-bank/pages/mobil...

[1]Except for Japan and all their NFC stuff... [2]http://en.wikipedia.org/wiki/NemID has been WILDLY debated though.

nawitus• 12 years ago

Danske Bank has offers that in Finland too, but I've never heard of anyone actually using it..

While we're talking about Danske Bank, here's a "funny" story about it: After Danske Bank bought out a Finnish bank called Sampo Pankki, they switched their online banking application to use Java. And it didn't work properly on Linux. I actually switched my bank because of that bs.

MrJagil4• 12 years ago

nemID uses Java as well and it's hell.

Mobile Pay is lovely, though. Even my local Candy Shop accepts it.

Systemic332• 12 years ago

Ye, MobilePay is pretty solid among people in Denmark, and there's even the competitor (competitor is a nice word, considering i've never heard of anyone with it) Swipp.

MrJagil4• 12 years ago

Yeah, just saw my first Swipp combercial the other day. Reminded me of http://currentc.com/ (i.e. bullshit).

kuschku• 12 years ago

Germany – and the whole SEPA (Eurozone + Denmark + Sweden + Norway + Britain + Switzerland) uses the same system.

It’s so fucking convenient to just open the app, enter either the bank account number or just select a contact from a list and be able to send money instantly.

denisnazarov• 12 years ago

The "making it rain" looks a lot like Stacks. http://rainstacks.com/

fra• 12 years ago

This video must have cost a pretty penny.

skizm2• 12 years ago

As much as I like competition, I hate entering my bank info into a lot of different places. I've been successfully ignoring venmo (in favor of paypal) for a while for the sole reason I don't want my info on more sites than necessary.

Seems like a lot of companies are trying to solve the "I hate entering my bank info into a lot of different places" problem, but it is only making the problem worse when half of my friends use one system and the other half use the other.

Someone needs to come up with a meta solution to sending money that doesn't involve me giving more companies direct access to my bank info.

(cue crypto-currency advocates)

cylinder• 12 years ago

fwiw paypal owns venmo.

skizm2• 12 years ago

Oh really? did not know that. Can I link accounts?

goshx• 12 years ago

I keep checking my calendar and it says November 17, not April 1... hmmm is it broken?

MattGrommes2• 12 years ago

The first thing people should think of when talking about anything Snapchat does is "How is this going to be used to abuse underage girls?" They've built the company on that so far, no reason to think this won't be used (and tacitly allowed by Snapchat) for the same.

mwerd2• 12 years ago

This makes no sense to me. 1) why are you singling out girls? 2) I was under the impression most of the minors sharing lewd photos on snapchat were sharing them with other minors. Sexuality in adolescents is pretty normal and healthy from my own experience and what I've read. The medium is fresh but afaik the behavior isn't. Therefore, I think "abuse" is hardly the appropriate word.

If you're insinuating that predators are using this software and snapchat is somehow protecting them, they've been pretty clear about cooperating with law enforcement in the past: http://blog.snapchat.com/post/64036804085/who-can-view-my-sn...

I don't use the app, I think it's silly, but lots of my peers (20somethings) do and have been of age since the app existed. It's not built on abusing underage girls. It's a low friction sharing platform. Blaming the users' behavior/content choices on the platform seems asinine.

MattGrommes2• 12 years ago

Abuse from peers and the community at large for sending nudes is heaped on girls vastly more than boys. I singled out girls for that reason although boys have certainly be subject to harassment. I absolutely think it's abuse for groups of boys targeting girls to "collect" their nudes for sharing and girls to take the pictures of other girls for use as bullying / shaming fodder.

Snapchat encouraged the idea that nobody but the receiver could ever see your photos, even though they knew this wasn't true. This takes perfectly normal sexual experimentation and turns it into a bullying service which they have done nothing about. Yes, it's the users' behavior but when a company aims at a young audience and then doesn't seem to care about their safety that it turns into something they're responsible for.

mliker• 12 years ago

Agreed, the OP's claim is preposterous...

johnnyn• 12 years ago

Is Instagram going to release Instacash now?

jordanthoms2• 12 years ago

Meanwhile, everybody outside the US is trying to figure out how it's taken so long for easy person-to-person payments to happen there.

Here in NZ, you've been able to pay directly to someone's bank account number for free for as long as I can remember, and my bank introduced payments to mobile numbers, facebook accounts, and email addresses 3 years ago. (Oh and it's totally safe to broadcast your account number to everyone, most companies have it listed on their website. No way to pull money from it through ACH without their permission).

softdev122• 12 years ago

the global issue, in theory, is easily solved with a cryptocurrency like bitcoin. if bitcoin could ever get a better user experience (don't have to go through the pain of setting up a wallet, etc.), these type of services would be much less attractive.

barnaby2• 12 years ago

Agreed. Going from a NZ bank to another country's bank isn't that simple anymore. Using an international currency makes it equally simple anywhere in the world.

Bitcoin already has a better user experience than banks. Just give it another year or two, to the point where bitcoin will be invisible to users the same way that Linux is invisible (yet, the world runs on it). These services will be rewritten with bitcoin under the hood and nobody will even know or care.

Negitivefrags4• 12 years ago

As someone else from NZ I would like to second this. We got a US bank account for our company and I was surprised how archaic the US banking industry is.

Another thing very interesting in NZ/AU is EFTPOS. EFTPOS is like the credit card system only with no transaction costs. Any shop in NZ/AU will take it.

The original business model for EFTPOS was that the user pays a fixed charge per transaction. I think it was something like 20c originally. However, because each bank was free to charge it's customers whatever it pleased for EFTPOS, price competition very quickly reduced that cost to zero (Which to be fair is what the actual cost of a purely electronic transaction should be).

There is no reason not to pay for even the most trivial purchase with EFTPOS so I haven't carried cash around in my entire life.

The only reason everyone still uses credit cards as well is for online purchases. EFTPOS is in person only. The number on the front of the card has no ability to be used for making a payment.

I think the place where VISA is starting to get more inroads into the NZ market is with NFC. NFC is getting more prevalent, and we are also starting to see things like this turn up as well: https://www.asb.co.nz/paytag/

jpmattia3• 12 years ago

EFTPOS is like the credit card system only with no transaction costs.

Somebody is picking up the tab. Is it the merchants? or the banks? gov't (=taxes)?

Aeoxic3• 12 years ago

There is no reason not to pay for even the most trivial purchase with EFTPOS so I haven't carried cash around in my entire life.

Unfortunately, there is a reason to still carry some cash in Australia: EFTPOS minimums. Airport stores are notorious for this, but it's quite widespread.

"Oh sorry, we have a $10 minimum on EFTPOS."

"... You're a coffee shop."

This stemmed from the fixed price per charge being charged to the merchants. The less you pay, the higher percentage that charge is of the total bill you're paying, resulting in them making slightly less profit.

In reality, those charges have been abolished by almost all, if not all, banks in Australia. It's now just a game of trying to make you buy $7 worth of miscellaneous stuff for your coffee. No thanks, I'll go elsewhere.

tomp2• 12 years ago

Which to be fair is what the actual cost of a purely electronic transaction should be).

When you pay with PayPal/Visa/MasterCard, you're not paying for the electricity or the transaction, you're paying for fraud insurance. I wonder, how does EFTPOS handle fraud, and who's responsible for it?

tmcz26• 12 years ago

Same here in Brazil. Bank accounts are "push-only", though utilities companies can "pull" if I allow them to. My bank even has a slick app to send money to others using their mobile number.

Credit card fees still exist and are pricier than the US, though. All chip-and-pin so POS fraud is much lower than Card Not Present.

adventured• 12 years ago

It's primarily a regulatory problem with how the US financial system is set up and overseen by the Federal Government. It's a hyper regulated industry. Trying to do anything even slightly different in the world of moving money, banking, finance etc is simply a nightmare.

Payment innovation would have been drastically faster, were it not for the obscene regulations that are in place at both the Federal and State levels. PayPal ran into this brick wall while traveling at a high rate of speed, very early into its existence.

olefoo• 12 years ago

You have a point, but you are missing a larger problem that is part of why the US financial system is regulated the way it is. Regulatory capture by the banks themselves. At this time the regulatory environment serves as much as a barrier to entry as it does protection for the consumer. All the "whips and bondage" compliance requirements are relatively easy to achieve if you're already a full-scale multi-billion dollar bank. But they are a formidable moat for any startup that needs to scale before they can afford to do all the necessary compliance auditing.

This is why simple.com is a friendly front-end for an existing financial institution and not a bank in it's own right.

kungfooguru• 12 years ago

So Europeans have better credit cards than us because they have less regulations? And New Zealanders have easy peer to peer transfers because of what less regulations?

And all of this could be more easily done by getting rid of banks except for a single federal bank.

vishnugupta• 12 years ago

Oh and it's totally safe to broadcast your account number to everyone, most companies have it listed on their website. No way to pull money from it through ACH without their permission

Totally second this; I'm from India. It's bit scary to know that in US "account number + routing number" is sort of secret key to the account, this is from my limited knowledge of course, but I don't think I'm far off.

And yes, account to account transfer has been around here for ages; though they were bit late to get it right now we have a whole range of options; pay to debit card, IMPS and what not.

Sometimes I wonder if banking in the so called third-world countries are is evolved than in the US, I could be wrong though.

JonoBB• 12 years ago

Even more to the point - Kenya and Tanzania have had M-Pesa (which allows payments and transfers via mobile phones) since 2007 (http://en.wikipedia.org/wiki/M-Pesa). Note that this is not necessaries smart phone stuff - just a plain 'ol mobile phone with text capabilities will do.

Also, I was visiting that region in 2006 and was struggling to add some phone credits to my phone that I had just purchased. Some random guy in the queue offered to send me credits from his phone, and I was pretty much blown away with how easy it was.

company• 12 years ago

What are you talking about? You can send payments to others from most if not all banks (other than small / local banks probably).

Xyik• 12 years ago

Seems like it could be easy to accidentally send someone money.

dzhiurgis• 12 years ago

A slight off topic, but how the fact that Apple Pay does not accept payments slipped thru?

I mean possibility of using iPad as POS is huge. I guess they will introduce it with iOS 9.

oldpond• 12 years ago

The music industry could really use this. Stream your music to an application, user likes the song, taps a button, you get 5 moneys, the user gets the song on their device.

pizzashark• 12 years ago

1. Look over someone's shoulder to get their phone password 2. Take phone discreetly 3. Enter phone, add self on snapchat, put money in Swiss bank account 4. Put phone back in person's pocket

ricardobeat• 12 years ago

Congratulations, you have +$250 in your swiss bank account.

prezjordan• 12 years ago

1. Steal someone's wallet. Much easier.

hobs• 12 years ago

1. Release a series of apps that do this with improper permissions.

Jamie452• 12 years ago

Is this like an early April Fools day joke?

habosa2• 12 years ago

Unless they have changed something under the hood I would NOT trust this service due to the insecure nature of the Snapchat API.

There are many 3rd-party API clients for Snapchat that can access all parts of the API (send message, send picture, get picture, etc.). I even wrote one for Java. They are easily accessed from a console with a username/password combo.

Considering how many password dumps are out there, it's reasonable to assume that many people have had their Snapchat login credentials compromised. Now I can use that info, log in from a command line, and start "snapping" myself money.

I know that getting someone's username/password is a pretty high barrier, but not high enough for the ability to send money instantly. Maybe there are more security details, but I wouldn't put my info into this just yet.

kxo• 12 years ago

How do you propose Snapchat, a company primarily producing a mobile application, prevent usage of its API?

You act like someone can't (with your username and password) (automatically or otherwise) scrupulously transact on your behalf with PayPal.

If you have the username/password - in a non-MFA system - you have access to everything.

habosa2• 12 years ago

True. One problem specific to Snapchat is that there are already a ton of 3rd party clients that users trusted with their username and password. That user/pass combo now suddenly has the potential for financial abuse without any new permissions. It's bad to add scope to previously granted authentication, especially when you're talking about finance.

jackgavigan• 12 years ago

I suspect that the impetus behind this wasn't Snapchat thinking "Hey, we should add a payments feature!", so much as some Square bizdev guy convincing Snapchat to add payments.

Payments is a highly competitive and commoditised market, which means that margins are under intense pressure (what I like to call a "Race to Zero"). The industry will "consolidate" around a few winners, and those winners will be the companies that successfully execute on the strategy of "Reduce the incremental cost per transaction to as close to zero as possible, and pump up the volume".

Everyone is desperate for volume, so every payments company is desperately trying to strike up as many partnerships like this as they can. Any app or website that has lots of users is a prime target.

wtracy• 12 years ago

Interesting. I would have expected the impetus to be Snapchat thinking, "We have lots of users. How do we monitize them?"

Robadob2• 12 years ago

In the UK one of the banks (Barclays) has setup a mobile app PingIt for this same concept.

Someone sent me money with it, had to sign up to receive it. Due to what I imagine is UK banking laws, a large amount of id/proof of address was required to fully register my account, so that I could also send money.

To verify my address they send a snail mail letter out with a verification code, being a student away at university (moving house every 12 months), I used my parents address. 3 weeks later when I was back home I attempted to verify my address, only to find the code had expired (despite it never mentioning anywhere that it must be done within x days). After rejecting the code, the app appeared to wipe all data regarding my account, now asking me to sign up from the beginning again.

This experience has really ruined my hopes, for a system I was already reluctant to enter.

jarek2• 12 years ago

Pingit is Barclays' implementation of a UK-wide system called Paym. If you already have a UK bank account and a UK mobile phone number, sending money with Paym to anyone who also has those things only requires the recipient's mobile number.

sararschreiber• 12 years ago

just about two weeks ago:

https://news.ycombinator.com/item?id=8557170

dkyc2• 12 years ago

The guys at Snapchat seem to be completely crazy. But maybe that's exactly what it takes to succeed in the really weird business of replacing cash payments. No matter what, I'm still lying on the floor laughing. Send money easy, it's all so breezy, Snapchat with Snapcash. Chat any cash amount - straight from your bank account! Send money easy, it's fast and greasy! Snapcash Snapcash Snapcash in Snapchat!

dkyc2• 12 years ago

If we are really in a bubble, this video will be one of the things people will point to shaking their heads 5 years from now.

abalone• 12 years ago

The economics of this are fascinating. Square loses money on every Square cash transaction, at least 22 cents to be exact.[1]

The potential justification for that is to promote the Square brand, get cards registered, and maybe hopefully drive usage of other (future) premium products/features that generate actual revenue. So, basically a marketing expense.

Here they're wrapping it in another company's app and brand, Snapchat.

Which still gets cards registered but, presumably, Snapcash users are gonna typically come back through Snapchat to do more transactions, letting Snapchat tax any future premium revenue.

Really weird and.. shall I say it.. bubbly..(shhhhhhhhhh!!!)

[1] Visa debit interchange is $0.21 + 0.05% http://usa.visa.com/download/merchants/visa-usa-interchange-...

michaelochurch• 12 years ago

It was dark at 5:30. April 1 can be cold but not dark at 5:30. Something is amiss... Has the earth's axis shifted?

For a serious response, this deserves to fail. To do anything with payments requires being careful. Snapchat is not careful, and even in ridiculous bubble times, no one is claiming otherwise. If you even trust Evan Spiegel with a bag of rock salt, you're a damnable fool.

That horrid video, by the way, is just another thing that's going to be used when people ask "What the fuck were they thinking?" about Tech Bubble 2.0. I just hope that these jokers don't take a bunch of legitimate startups down with them. It makes me angry to see these asswipes getting so much press, because for every Evan Spiegel there are 10 people with genuine ideas who struggle to get funding after these jokers let their investors down.

Also, if you use "Snapcash" as a verb I will fucking cut you.

sahara• 12 years ago

This may be the first big move towards "Snapchat as America's Tencent"[0], and although there are red flags all over the place and that video (especially the software-eats-making-it-rain bit) is absurd, I get the feeling this might actually work.

[0] http://www.businessinsider.com/andreessen-snapchat-2014-1

Trillip• 12 years ago

And... this is when Snapchat turned into MFC

Soyuz• 12 years ago

hot girls will be the richest in the world now :p

htor• 12 years ago

Ugh. This video makes me physically ill. The idea is fine, but why this horrible marketing? The world is not Las Vegas.

cheshire137• 12 years ago

Trusting Snapchat to be anywhere near my money is laughable.

Introducing Snapcash

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