Snapchat to Shut Down Snapcash P2P Feature
More than three and a half years after Snapchat first allowed users to send money to each other using the platform, the app has announced it will be disabling their Snapcash feature next month. The news was first discovered by TechCrunch who noticed some interesting code in the Android version of the app, with Snapchat later confirming that the feature would be shutting down on August 30th. This development has led some to wonder what may have led to the decision and what it means for both peer to peer (P2P) payments and FinTech in general.
One theory why Snapchat is abandoning Snapcash involved cases of “misuse.” For example TechCrunch notes that some adult performers had used the platform to sell illicit photos or videos. With Snapchat making great strides in building a mainstream brand, it would make some sense that they’d want to distance themselves from such activities if they truly were that prevalent.
A more likely scenario suggests that the P2P landscape has simply grown too crowded in the years since Snapcash launched. Most notably Zelle (which launched nearly three years after Snapcash) has recently taken the lead among peer to peer payment services and is on track to grow their lead in the coming years. Additionally services like Apple Pay Cash have taken the Snapcash concept of sending money via messaging and brought it to a larger audience.
Another big question surrounding Snapcash’s closure is what this means for its partner in the endeavor, Square Cash. In a statement to TechCrunch, a spokesperson for Square made it clear that the standalone Cash app isn’t going anywhere, noting, “With more than 7 million monthly customers, Cash App continues to see strong growth, while delivering utility and flexibility for individuals’ money. We continue to focus on building new features that address the financial needs of our customers as we work to expand financial access for all.” Meanwhile Snapchat also mentioned their partnership with Square in their statement, saying, “Snapcash was our first product created in partnership with another company – Square. We’re thankful for all the Snapchatters who used Snapcash for the last four years and for Square’s partnership!”
Although Snapcash’s demise is somewhat surprising, it’s not entirely unexpected. Given the newfound prominence of Zelle coupled with the easy-to-use integration of Apple Pay Cash and others, Snapcash’s small fish status may have proven to be more trouble than it was worth — especially with the potential PR problems that came along with its usage by adult performers. As for Square, the loss of the partnership likely isn’t as big a blow as some might assume. Similarly the P2P and FinTech sectors likely won’t see much of a change with Snap out of the picture. All that said, Snapcash likely helped introduce some of a certain age to the concept of P2P payments and for that it deserves to be remembered.