Snapchat and Square recently announced “Snapcash”. This service enables to exchange money directly between two persons (so called P2P: person to person) right from the Snapchat app prompt line. At present it is only available in the USA and based on debit cards. Just fill in the amount preceded with a $-sign in the particular chat, push send and you are done.
There is much to say about the – in my view unlucky – combination of P2P (person-to-person) payments with this particular app, but I will leave that to others who are much better at ranting then I am. Just be mindful though not to answer seemingly casual questions like “What does an ipad air 2 cost?” because before you know you have transferred the corresponding amount of money as an answer…
Not digital cash
While the transaction appears to be a P2P exchange to the users Snapcash is not exchanging money at the device level. This P2P service is de facto an online solution, just like almost any other online payments methodology. The clear benefit of Snapcash is the very very simple workflow for the persons exchanging the value.
Snapcash certainly is not a payments method were people – without the interference of third parties – can exchange value e.g. when offline. To have a true P2P solution, in my eyes at least, it also, or even primarily, should be able to cater for direct exchange of the value between payer and payee; like cash. To do so the availability of a digital currency is a prerequisite. NB Mintchip was a neat example in my eyes.
XS2A to the rescue?
With the scattered payments processing landscape in EU a service like Snapcash seems impossible to realize unless a behemoth as Mastercard would step in with its debit scheme which then should be embraced by a large portion of the banks. Unless a (standardized) way of coupling to the bankaccount would be available for third party app’s like XS2A. This happens to be one of the promises of access to the bank account as part of the renewed Payments Service Directive (a.k.a. PSD2)
The impression I have is that the EU banking community is not willing nor able to take the lead to create the standards and frameworks needed for XS2A (nor e-mandates, nor SEPA remittance etc.) Individual banks will offer API’s but whether this will lead to a reasonable coverage of participating banks and an economical way to connect to the bank accounts for the service providers having to hook up to the various banks by means of different api’s remains to be seen.
Update 18 March 2015
American Facebook users will soon be able to send money to each other through the social network giant’s Messenger app.
via Finextra: Finextra news: Facebook brings P2P payments to Messenger.