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Introducing Snapcash (snapchat.com)
269 points by kevando on Nov 17, 2014 | hide | past | favorite | 193 comments

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).

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/

> 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.

> Oh sorry, we have a $10 minimum on EFTPOS." > "... You're a coffee shop."

I always just ask them to charge me a surcharge instead. Some places "get it", but a few have stared at me blankly. I don't want to a) walk back down the street to an ATM or b) buy a bunch of pastries that I don't want to eat just to pad out my bill.

But otherwise, AU/NZ's EFTPOS system is generally fantastic, although being replaced (anecdotally) by the credit card system since PayPass/PayWave were deployed so quickly here.

> I always just ask them to charge me a surcharge instead. Some places "get it", but a few have stared at me blankly. I don't want to a) walk back down the street to an ATM or b) buy a bunch of pastries that I don't want to eat just to pad out my bill.

Most stare at me blankly and then tell me they can't do that.

You type the value in yourself. It's not difficult. Do it.

Right, I suspect that the difference is that there never were any charges per transaction to the merchant in NZ. I've never seen a shop that had a minimum size for an EFTPOS transaction here.

On the other hand there are a lot of shops that either have a minimum transaction size, or a surcharge, on Credit Card transactions.

First you guys make us look like idiots with our Internet capability, and now with the transaction charges. Slow down a bit and let us catch up, yeah?

> On the other hand there are a lot of shops that either have a minimum transaction size, or a surcharge, on Credit Card transactions.

That also happens here in Australia. I'm fairly sure that's common worldwide.

> 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)?

The merchant has to buy (or rent) an EFTPOS terminal. The bank also charges the merchant a setup fee to connect your terminal to your bank account. Once that has been done there are no more fees.

You have to look at the way it evolved. Because this is a service offered to customers by each bank in competition with each other, the competition drove the price per transaction to zero.

> the competition drove the price per transaction to zero.

So the customers are paying. The banks just build it into the banking fees.

It's not like that infrastructure is free.

I think it's worth remembering what job the bank is supposed to have.

The bank is supposed to make it attractive for you to give them your money so that they can then lend it to others or invest it however they see fit to make a profit. Remember, you are doing them a service by handing them your cash, not the other way around.

If the price for them is to create infrastructure for payments offered free of charge in exchange for being allowed to have access to your money than that is a price that they should be happy to bear.

In NZ banks there are generally no monthly fees for personal accounts and no fees for transferring money to others. I would generally expect to pay zero bank fees at all so long as I'm not going in to overdraft. I'm not saying that everything is 100% sunshine and roses, but certainly that is the minimum I should expect the bank to do in order to earn the right to hold my money.

> so the customers are paying.

Yeah. Kindof. NAB has the debit card account free of charge, unlimited ATM withdrawals, transfers across banks free and attractive savings rates. CBA's fee is $5/mo unless you get a salary per month through your account. Pretty much the same for the 4 major banks.

In France you need to pay 60-120€/year for an account + CC. In Australia you don't need to pay. In US don't they beg you to open a credit card?

> In US don't they beg you to open a credit card?

Yeah, pretty much. If you are responsible, you get back 1% of all of your purchases on the CC. And in the spirit of "who pays for that", it's the folks carrying a balance who pay for the 1% cash back on everything.

it's not the people carrying a balance that pay for that - it's the merchants. it's an extra fee added on to the credit card fee that a merchant can't predict nor can they avoid.

As a merchant, I charged people, say... $10 for something. The fee might be 2.9%, but if it was 'rewards card' (which I can't tell ahead of time) the charge would show up as 4%.

The cost is passed on to every in the form of higher prices. The people carrying a balance have nothing to do with this. That would simply eat in to the banks' profits. Why would they just randomly give people x% of the profits from balance-accrued interest?

Hm... I wonder who gets the extra 0.1%.

Hrm.... indeed.

It's different. I've had some cards charge me > 4% - one was... 5% IIRC. I think it was an Amex.

Another group of folks who pay for the 1% cash back are the merchants who pay fees well over 1% for transaction processing. http://www.cardfellow.com/blog/credit-card-processing-fees/

Can you get an account in NZ as a US citizen without residing there?

I get what you're saying, but not everything costs money. For example, SMS piggybacked on infrastructure that already exists, so they are pretty much free to run (despite what your phone bill might say).

Similarly, this payment infrastructure could be a similar thing (maybe it opened up channels used for other mechanisms already?)

Your question was answered in the parent comment: the users paid, and competition drove the fees to zero, i.e., the costs are now paid by the banks.

No, in some countries there are transaction costs for EFTPOS, but it's very low compared what is being charged for credit card transactions.

> 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?

I'm not sure, because I've never had a fraudulent transaction with it and never heard of anyone who has. Probably because it's point of sale, card present only. (Fraud with ATM withdrawals is an issue, but that's the bank's problem).

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.

> 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.

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.

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.

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.

I'm not sure if you're being sarcastic or not, but there are thousands of banks in the US [1]. Getting rid of all of them except for a single federal bank is a gargantuan task.

1. http://online.wsj.com/articles/SB100014240527023045794045792...

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.

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.

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.

I think you're radically underestimating the entrenched interests that are at play here.

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

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.

"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.

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

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.

I think the point is that they ARE sending eachother money, just in less efficient ways. Looking at how people use snapchat it isn't as much about ephemeral as it is about speed. It's much easier to send a picture to someone in snapchat as the flow is better, and it doesn't leave a stupid photo on your phone (and on several cloud backups) that you didn;t want to stick around forever (e.g. check out this awesome car, you don't need a copy of that)

I thought this move was awesome. In my 17-25 year old life my friends and I were constantly owing eachother money for random things. If someone could pay me back right there for no charge that would have been my dream. We debated building an app for it at one point, just to tally who owes who what. It was a big enough issue I carried an excel doc but not enough to go out and search a standalone app for it. If the function is easily integrated into an app I use for something similar, however, I feel like I may pick it up.

Also teenagers aren't using gmail or square, etc. now so if snapchat can take them over before university they have a better chance of winning, imo. I do believe this is a market to be won going forward, at least in that 17-25 demographic (also why bitcoin got me excited, no fees for small transactions is a REQUIREMENT for person to person payments).

> and it doesn't leave a stupid photo on your phone (and on several cloud backups) that you didn;t want to stick around forever (e.g. check out this awesome car, you don't need a copy of that)

You should probably research Snapchat's history and behaviors.

the OP's argument sounds more like one of convenience though -- I don't really care if there's a cached copy of my awesome car picture somewhere.. I just don't want to see it in my main photo app.

How are they able to transact with Visa and Mastercard without fees?

I assume any "no fees" clause means that they're not taking fees at this time. It doesn't mean "no fees anywhere in the system". So there very likely is a 3% fee to the user, just not from snapchat.

Even with their money?

Most of these users never used Paypal so if one of their friends tells them they can send money over Snapchat they probably won't think two seconds about it.

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.

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

I'd like to see a venn diagram of Snapchat users, people who actually know who Square are, and people who don't trust snapchat's security. I'm willing to bet that people who wouldn't trust snapchat would also know enough about security to have heard of, and (possibly) trust Square.

Fair, but even without the information of who/what Square is beforehand, you can look them up. I'd be more likely to trust them than Snapchat simply because they've been around and have multiple payment solutions out already. And even if you can't be motivated to do a few quick searches, you could likely make some assumptions that snapchat didn't pick up some random company off the street to handle their finances.

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


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.

s/developed world/USA/

Signed, Paym user

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.

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

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

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."

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

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.

....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.

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.

Setting up a PayPal account and setting up an age-locked account that requires an associated bank account (in the form of a debit card) appears to be more effort on the SnapChat payments side, at least to me. The only reason for this fear (which really should be associated with any social media micro-payments system) being touted here is because of the reputation of SnapChat as an app for sending nude pictures. The same exact concerns exist in other places and have been dealt with by a large number of companies at this point.

> The same exact concerns exist in other places and have been dealt with by a large number of companies at this point

Can you identify a similar set of circumstances where this has been successful for more than a brief period?

My point was any company that deals with a large amount of user submitted media will eventually end up having to have an abuse team that monitors user submissions for illegal activity. I don't see how the Snapchat's situation is unique from the problem of identifying illegal material, other than the fact that there is now a monetary way of receiving payment (which has existed and still exists today). In fact, Snapchat could even attempt to claim less liability if the material is never stored on their servers, compared to a file sharing or image hosting site that actually contains the illegal material. In this sense, they would only be liable if they knowingly allowed this trade to take place on their network, similar to an ISP, in my view.

...Not that anything is wrong with exchanging nudes for money.

But I do expect some scrutiny due to the oh-so-popular puritanism Americans hold in public life towards sex (both democrats and republicans) yet largely ignore in private.

Snapchat has come under fire because a significant portion of those nudes are technically child porn.

Yeah, except there is no proof that there is any exchange of goods taking place in the overwhelming majority of these.

Do you think teenage girls and boys are really going to start selling their nudes? Just on a shallow examination of this possibility, it seems exceedingly unlikely to ever be a problem on a scale larger than a handful of cases. The social aspects of trying to sell "nude" pictures of yourself would be utterly taboo. The only market would be for people that you don't know, yet then the risk increases dramatically. There are already 100s of sites where they can do exactly this (pretending to be 18), yet its not happening, at least on the scale that the fear represents.

This happens already today not only with Snapchat, as well as on the multitude of cam services out there. (The taboo you mention makes the problem worse, as it can quickly escalate to blackmail.) Is it likely to get worse with integrated payments? I would guess yes.

I didn't say there'd be an epidemic of underage people selling nude selfies. I said I think this is going to get interesting. By that I meant that there will likely be some overlap between the child porn stuff and the new payments system.

> it seems exceedingly unlikely to ever be a problem on a scale larger than a handful of cases.

All it takes is a "handful" (or less) when child porn is the subject. I wouldn't go anywhere near money transactions given the risks.

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.

Its age requirement + debit card. I think that is a fairly effective blocker. At the very least, it'll almost completely stop any chance of children under 15-16 from joining the program and sending/receiving money. There will always be chances of abuse with any platform that allows sharing. I just don't understand how this announcement is anymore scary than other social media adding into social payments, except for the typical stereotype of Snapchat only being used for nude pictures.

If you are speaking about adults selling pictures of abused children back and forth, this'll be no different (even less secure) than current technologies that pedophiles use to avoid detection.

> Its age requirement + debit card. I think that is a fairly effective blocker. At the very least, it'll almost completely stop any chance of children under 15-16 from joining the program and sending/receiving money.

Can under-16s not get debit cards in the US? I know they can get them here in the UK, I got one when I was 14, IIRC.

An anecdote: at least when I was growing up, I didn't notice anyone under 18 with a debit card; most people used cash for purchases or borrowed credit cards from their parents when they wanted to go shopping on the weekend.

That said, I don't know if there are regulations here in the US concerning debit card age requirements, but from a cursory glance of a few US banks, it looks like children under 18 are allowed to get a checking account (and hence, a debit card) provided that they get a joint account with their parents. Perhaps the policy is different for teenagers who wish to separate finances from their parents for whatever reasons, but those are edge cases.

Yep, I got a debit card when I was about 13. I distinctly remember going to the bank with my mom to open a checking account, and explaining to the teller that I needed a debit card because I wanted to sign up for an account with this new company called Paypal.

Here in the UK I could get a fully independent bank account. I just got meagre interest, no chequebook or direct debit, and no overdraft.

I believe you need the account to be co-owned by a parent until you are 16. I know that when I was under 14 with a paper route and needed a checking account (early 2000's), I needed my mother to be on the account as well. While that doesn't prevent shit in terms of underage users here, at least parents who know and watch out for this can check and know that their kid is using it.

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)?

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.

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.

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.

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.

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.

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.

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.

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.

If I was every paying people money regularly, I always just found sending the money via bacs through online banking to be easiest.

I would do this if I lived in the UK but I live in the US where we only have ACH and even that's not really close to BACS.

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


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.

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-...

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.

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

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?

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...

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.

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.

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-...

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.

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.

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.

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

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.

nemID uses Java as well and it's hell.

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

JS coming in the next couple of months. They are rolling it out gradually. (EDIT: NemID, JS-version that is)

Source? (just curious, wanna read more)

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

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

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.

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)

fwiw paypal owns venmo.

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

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!

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.

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.

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

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.

Facebook + Paypal vs. Snapchat + Square.

That's a pretty fair fight.

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

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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

I would expect similar functionality in other messaging apps soon.

Is Instagram going to release Instacash now?

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

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

1. Steal someone's wallet. Much easier.

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

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.

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

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.

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

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

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


—"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"

Who is going to download clinkle

Let me stop you right there...

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

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

I was surprised to come here and see all the positives for Venmo. I have zero interest in a payment service that is going to hold my money until I request a cash out. Here in the midwest, I've been able to convince suburban parents to use Square Cash via the email cc feature. It's about as painless as it can get, particularly when they still send checks around to each other all the time.

Agreed. Most people I know use Chase QuickPay, of all things.

Anecdotally, as a college student on the east coast, I know a ton of people who use Venmo (I use it myself).

However, this same group of people uses Snapchat as well.

It caught on in San Antonio for a bit but seems to have lost all marketshare to Square.

Here in Seattle many people use it, and I know of people who use it in Chicago

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

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

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

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...

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.

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.

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).

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.

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.

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.

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.

Trusting Snapchat to be anywhere near my money is laughable.

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

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.

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

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

Everybody wants to be a bank.

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

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

SnapCash does not work like Venmo.

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

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.

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.

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.

When I was in high school there was a similar shaming incident with a girl and a VHS tape. It's not the medium that's the problem. While I think the majority of the HN community would agree that snapchat has serious security issues, once the images leave the victim's handset it's a hopeless situation. In digital media if it's consumable it's reproducible (just need another camera). That's the lesson for the kids--not this app is or isn't "safe" for nudie pics.

I don't really see a good way to address the bullying issue. It's been more than a decade since I received my first lecture on the permanence of content published to the internet (by my 70ish year old school librarian no less). This isn't a new problem and it seems there's no shortage of regrets out on the WWW. It's safe to say the jury is still out on https://en.wikipedia.org/wiki/The_Right_to_be_Forgotten which is what I gather is at least the spirit of what you're advocating?

IMO who's responsible here are the kids and vicariously the parents. The parents need to educate their kids, pay attention to what the kids are doing, and support their bullied kids--even through the justice system if necessary. Less nudie pics created and more punishments of blackmailers are about the only things I think will help. Maybe snapchat not being so naive/deceptive with their security would help in the short term but my bet is any of the 100 other "secure" messaging apps would fill the sucker/idiot gap pretty quickly.

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

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

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

And... this is when Snapchat turned into MFC

This video must have cost a pretty penny.

I wonder if this is replacing Squarecash?

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

Does it work outside the US?

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."

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

Is this like an early April Fools day joke?

Disappearing cash!

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.

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.

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

> "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..

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