Snapchat launches money transfer feature

Snapcash allows users to transfer money to friends inside app

Snapchat has launched its very own money transfer service after teaming up with payment processing firm Square to beat Facebook to the punch.

Snapcash allows users to send and receive money directly from the app, and is now available in the US, far ahead of Facebook's long-rumoured payments mechanism, which is understood to still be in the works.

Snapchat's payments feature is based on Square's own technology, Squarecash, which allows people to enter a sum of money in the subject line of an email and transfer it to someone.

Snapchat, which rejected a $3bn takeover bid from Facebook this time last year, stressed the security and simplicity of its new feature in a blog post.

It said: "The product you're seeing today is fast, fun, and incredibly simple. We set out to make payments faster and more fun, but we also know that security is essential when you're dealing with money.

"Square has a ton of experience in this area and our teams have been hard at work to make Snapcash a great experience for everyone."

Once users enter their debit card details into the app, they are stored by Square, rather than Snapchat, and Square then processes all payments and sends cash directly to the payee's bank account.

To send money, users can swipe into Snapchat, type the dollar sign followed by an amount, and hit the green button.

It is not clear when the payment mechanism will be available outside the US, but the news comes as alternative payment methods challenge banks' dominance in the space.

Yesterday IT Pro reported that Deutsche Bank is working with Microsoft, IBM and HCL Technologies on a series of innovation labs designed to improve its digital banking.

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