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Snapchat moves into mobile banking with the launch of Snapcash: Will it rival Facebook, Twitter?
Snapchat is taking the plunge into the mobile payments market, with the announcement of a new app that lets users transfer cash at the hit of a button.
The photo messaging service, which lets users send photos vanish after a maximum of 10 seconds, unveiled Snapcash in a blog post yesterday:
The product you’re seeing today is fast, fun, and incredibly simple. 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.
Users simply have to type a dollar sign and the amount they want to send into a message.
Initially it will only be available to those in the US, who have a debit card and are aged 18 years or over.
Analysts have high hopes for the mobile payments industry and Forrester research has predicted the market in the US will triple over the next five years. As such, a number of tech titans are eager to break into it.
Snapchat's latest foray into mobile payments could pit it against the likes of Facebook and Twitter.
Facebook could one day unveil something similar to Snapcash.
In October, media reports speculated that Facebook was working on a mobile payments service.
Stanford university student Andrew Aude used a software hack to reveal the social network's unpublished code. He found something that looked like Facebook was working on a project that would eventually enable users to link their debit cards and Facebook accounts in order to send money to each other.
What's more a former president of online giant Paypal, David Marcus, currently oversees Facebook's mobile messaging division.
Twitter users in France can do more than just chatter: they now have the ability to tweet payments to one another. S-money, a division within one of the country's biggest banks, provides the infrastructure behind the service.
Earlier this year the social media network broke into the e-commerce market by launching a test "buy" button, which would let users buy products that appear on their Twitter feed. Presently, it's only available to a small percentage of US users.
Venmo
Venmo is an app which lets users send and request money from people using a smartphone. They must download and then link the app to their bank accounts. It also allows them to connect with friends for future transfers.
It is owned by Braintree, which was acquired by Paypal last year, and by July this year it was handling over $1bn (£639m) in consumer mobile payments annually, according to a blog post by chief executive Bill Ready.
As such, Snapchat's announcement is exciting, but it remains to be seen who will win in the consumer mobile payments space.