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).
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/
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.
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.
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.
On the other hand there are a lot of shops that either have a minimum transaction size, or a surcharge, on Credit Card transactions.
> 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.
Somebody is picking up the tab. Is it the merchants? or the banks? gov't (=taxes)?
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.
So the customers are paying. The banks just build it into the banking fees.
It's not like that infrastructure is free.
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.
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?
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.
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?
It's different. I've had some cards charge me > 4% - one was... 5% IIRC. I think it was an Amex.
Similarly, this payment infrastructure could be a similar thing (maybe it opened up channels used for other mechanisms already?)
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?
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.
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.
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.
This is why simple.com is a friendly front-end for an existing financial institution and not a bank in it's own right.
And all of this could be more easily done by getting rid of banks except for a single federal bank.
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.
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.
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.
Lucky for Snapchat their users and potential investors don't care about security in the slightest.
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).
You should probably research Snapchat's history and behaviors.
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.
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."
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.
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 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.
Can you identify a similar set of circumstances where this has been successful for more than a brief period?
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.
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.
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.
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.
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.
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.
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.
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'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.
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.
I agree, I feel like Snapchat/cash will kill in this space due to ease of use.
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.
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!!!)
 Visa debit interchange is $0.21 + 0.05% http://usa.visa.com/download/merchants/visa-usa-interchange-...
Snapcash seems to be the first app that approaches what we've had for a while now:
Except for Japan and all their NFC stuff...
http://en.wikipedia.org/wiki/NemID has been WILDLY debated though.
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.
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.
Mobile Pay is lovely, though. Even my local Candy Shop accepts it.
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)
e: Looks like it's not actually snapcash -- but another so-named app. Looks like someone is getting a ton of unintentional downloads today.
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.
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.
That's a pretty fair fight.
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.
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.
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.
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.
Seems like this is more about paying strangers, including possibly retailers.
I would expect similar functionality in other messaging apps soon.
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."
—"Uh, pay with… clinkle?"
—"Do you need the key to the restroom?"
—"Pay… with… clinkle"
Let me stop you right there...
However, this same group of people uses Snapchat as well.
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...
Otherwise anybody could steal money from you as long as they can get into your phone and open snapchat.
I mean possibility of using iPad as POS is huge. I guess they will introduce it with iOS 9.
Just like the countless comments here, years ago, expecting Twitter to die because it won't make money.
Then they discover how much support effort goes into stopping, or untangling frauds, scams, and robberies.
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.
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.
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.
"For now, Snapcash is available to Snapchatters in the United States who have a debit card and are 18 or older."
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.
That first comma makes that sentence so hard to read..