Mobile messaging company Snapchat is launching a new service that allows its users to send money to each other, in a partnership with online payment company Square.
The service, called Snapcash, allows Snapchat users who associate their debit cards with their account to quickly send money to a contact by chatting on a smartphone, typing in a dollar sign, entering an amount and pressing a green button, explained the Monday the app in a post on its official blog.
The move is the latest sign of expansion plans by Los Angeles-based Snapchat, which allows its users to exchange photos that automatically disappear after a few seconds.
The company has been valued at $10 billion in its most recent fundraising campaign, according to media reports, and is seen as a growing threat to internet companies like Facebook and Twitter.
"We set out to make payments faster and more fun, but we also know that security is essential when you're dealing with money," Snapchat said in the post.
The company assured that the debit card information will be stored by Square and that the company will process the payments, transferring the money between bank accounts. Snapchat said that Snapcash is available in the United States for users over 18 years of age.
What are immediate payments
Although we live in a world of instant messages, an electronic payment in euros can still take a full business day to process. And if we order over the weekend or on a holiday, the money may not start traveling to the recipient until the next business day.
With immediate payments, the money is available in a few seconds in the beneficiary's account at any time of the day, every day of the year. In some European countries it is already possible. But it should be throughout Europe, not only for payments in euros to people or companies from the same country, but also from any other European country. To make this a reality, European payment service providers have agreed on a set of rules and standards known as the SEPA Instant Transfer Scheme.
SEPA is the Single Area for Payments in Euros and its objective is that we can pay in euros to beneficiaries anywhere in Europe —by direct debit, debit card or transfer— with the samease, security and efficiency as within the same country.
What are the advantages of immediate payments?
With instant payments, you can order and receive electronic payments in euros anytime, awhere. In some countries it is already possible to order immediate payments via mobile phone with the same speed and convenience as when paying with cash, for example, to split the bill at a restaurant or lend money to a family member or friend.
In e-commerce, immediate payments eliminate the risk of sellers not getting paid, since the shipment of the goods or the provision of the services can be synchronized with the payment. In business-to-business business, immediate payments improve cash flow, make it easier to manage funds, reduce delays, and speed up bill payment.
Immediate payments can also be a means of financial inclusion. According to European law, any EU citizen has the right to open a basic payment account regardless of their financial situation or place of residence. The ability to order or receive instant transfers from a mobile phone can be an incentive to access financial services for the first time or to use them more frequently.
When can I start using Instant Payments?
Payment service providers are not required to offer immediate payments to their customers. However, the ECB encouraged them to offer immediate payment solutions from November 2017. Some already do so and others plan to do so in the future. The experience of countries that have introduced instant payments, such as Denmark and Sweden, shows that they have quickly gained popularity.
What is the role of the ECB?
The ECB has an interest in immediate payments as it is responsible for the security and efficiency of electronic payments in euros.
To promote innovation in payments, the ECB works with the financial industry to adopt common rules and standards and remove remaining barriers to cross-border payments within the EU. The ECB chairs the Euro Retail Payments Council, a group in which representatives of payment service providers and users work together to promote the integration, innovation and competitiveness of the EU payment market. The Euro Retail Payments Council has spearheaded work on the pan-European instant payment system and monitors its progress due to its increasing use.
To make it easier for more payment service providers to offer immediate payments, the ECB is developing a new service that will allow them to settle payments immediately and securely at any time of the day. The TARGET instant payment settlement (TIPS) service will go live in November 2018 and will give payment service providers an additional incentive to offer these types of payments by allowing them to more easily reach customers of other payment service providers. payments throughout Europe, at a reduced cost. As a result, we expect immediate payments to become commonplace across Europe. Check this page for the latest news.
0
Sign in to leave a comment.