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.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

Robinhood Reveals More Details on Upcoming Retirement Account

After officially announcing plans for retirement accounts during an earnings call last month, Robinhood has now revealed more details about the upcoming feature and opened a waitlist for customers. First, Robinhood Retirement will offer both Roth and Traditional IRAs to users. With these accounts, customers will be able to invest in stocks and ETFs. Additionally, accountholders will be able to craft a custom portfolio and will be able to view...

Discover Announces 5% Bonus Categories for First Quarter of 2023

The popular Discover It card — which features 1% on all purchases as well as a slate of bonus rotating categories each quarter — has revealed what purchases will earn cardholders that 5% bonus starting January 1st. For the first quarter of 2023, Discover It cardholders can earn 5% back on grocery store, drug store, and select streaming service purchases. However, there are a few asterisks to note with this offer....

AllWork Raises $4.9 Million From FINTOP Capital 

A FinTech focused on freelancer payroll has closed a significant early-round investment. This week, AllWork announced that it had raised a $4.8 million round. The Series A was led by Nashville-based FINTOP Capital with no other participants. As a result of the transaction, FINTOP's Chris Haley and Rick Holton will join AllWork's board of directors. Previously, AllWork closed a $3.8 million seed round in 2019, bringing their to-date funding total to $8.7...