What happened: One-to-one messaging app Snapchat announced a mobile payments feature last week (appropriately called Snapcash). In a partnership with Square, Snapchat now allows users to transfer money between their accounts on the network. Square handles the actual cash movement and a user’s bank account information while Snapchat adds a layer to its service for more than 100 million monthly active users (majority of which are between the ages of 13 and 25).
What it means for brands: The move pushes Snapchat beyond just a photo-sharing and chatting application and into competition with mobile payment services like PayPal and Venmo. E-commerce and online payment security is a hot topic these days, though Mashable notes that Snapchat’s younger user base does not seem too concerned with these issues and is likely to use the service freely at the outset. Beyond peer-to-peer payments, the app could one day open e-commerce to brands on the platform. For example, a merchant could publish a Story ad (Snapchat recently began running ads) and allow the user to purchase the item shown in the ad instantly through Snapchat. TechCrunch also suggests that, down the line, Snapchat may be able to use the Square data to improve its ad targeting as well.