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Introducing Snapcash

blog.snapchat.com

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Re: Introducing Snapcash

#161

Post by aragot »

jpmattia wrote: post #155
Negitivefrags wrote: post #139

Earlier quoted context omitted.

The merchant has to buy (or rent) an EFTPOS terminal. The bank also charges the merchant a setup fee to connect your terminal to your bank account. Once that has been done there are no more fees. You have to look at the way it evolved. Because this is a service offered to customers by each bank in competition with each other, the competition drove the price per transaction to zero.

> the competition drove the price per transaction to zero. So the customers are paying. The banks just build it into the banking fees. It's not like that infrastructure is free.

> so the customers are paying.

Yeah. Kindof. NAB has the debit card account free of charge, unlimited ATM withdrawals, transfers across banks free and attractive savings rates. CBA's fee is $5/mo unless you get a salary per month through your account. Pretty much the same for the 4 major banks.

In France you need to pay 60-120€/year for an account + CC. In Australia you don't need to pay. In US don't they beg you to open a credit card?

Re: Introducing Snapcash

#163

Post by mikeg8 »

dokem wrote: post #77

What an awkward monetization scheme. Seriously, this is why you passed up x billion dollars? Should've taken the money and tried to actually help the world. Silicon Valley greed and delusion at it's finest.

I still don't understand how they monetize from this at all. Square cash (which this is built on) has no fees...

Re: Introducing Snapcash

#165

Post by olefoo »

adventured wrote: post #148
jordanthoms wrote: post #112

Meanwhile, everybody outside the US is trying to figure out how it's taken so long for easy person-to-person payments to happen there. Here in NZ, you've been able to pay directly to someone's bank account number for free for as long as I can remember, and my bank introduced payments to mobile numbers, facebook accounts, and email addresses 3 years ago. (Oh and it's totally safe to broadcast your account number to ev…

It's primarily a regulatory problem with how the US financial system is set up and overseen by the Federal Government. It's a hyper regulated industry. Trying to do anything even slightly different in the world of moving money, banking, finance etc is simply a nightmare. Payment innovation would have been drastically faster, were it not for the obscene regulations that are in place at both the Federal and State level…

You have a point, but you are missing a larger problem that is part of why the US financial system is regulated the way it is. Regulatory capture by the banks themselves. At this time the regulatory environment serves as much as a barrier to entry as it does protection for the consumer. All the "whips and bondage" compliance requirements are relatively easy to achieve if you're already a full-scale multi-billion dollar bank. But they are a formidable moat for any startup that needs to scale before they can afford to do all the necessary compliance auditing.

This is why simple.com is a friendly front-end for an existing financial institution and not a bank in it's own right.

Re: Introducing Snapcash

#166

Post by jpmattia »

aragot wrote: post #161
jpmattia wrote: post #155

Earlier quoted context omitted.

> the competition drove the price per transaction to zero. So the customers are paying. The banks just build it into the banking fees. It's not like that infrastructure is free.

> so the customers are paying. Yeah. Kindof. NAB has the debit card account free of charge, unlimited ATM withdrawals, transfers across banks free and attractive savings rates. CBA's fee is $5/mo unless you get a salary per month through your account. Pretty much the same for the 4 major banks. In France you need to pay 60-120€/year for an account + CC. In Australia you don't need to pay. In US don't they beg you to…

> In US don't they beg you to open a credit card?

Yeah, pretty much. If you are responsible, you get back 1% of all of your purchases on the CC. And in the spirit of "who pays for that", it's the folks carrying a balance who pay for the 1% cash back on everything.

Re: Introducing Snapcash

#167

Post by abalone »

The economics of this are fascinating. Square loses money on every Square cash transaction, at least 22 cents to be exact.[1]

The potential justification for that is to promote the Square brand, get cards registered, and maybe hopefully drive usage of other (future) premium products/features that generate actual revenue. So, basically a marketing expense.

Here they're wrapping it in another company's app and brand, Snapchat.

Which still gets cards registered but, presumably, Snapcash users are gonna typically come back through Snapchat to do more transactions, letting Snapchat tax any future premium revenue.

Really weird and.. shall I say it.. bubbly..(shhhhhhhhhh!!!)

[1] Visa debit interchange is $0.21 + 0.05% http://usa.visa.com/download/merchants/visa-usa-interchange-...

Re: Introducing Snapcash

#168

Post by unclebucknasty »

untog wrote: post #6

This kind of thing will be the death of Venmo, and makes me wonder why they haven't moved faster. An app that already has your social network will have more success adding friend payments than your friend payments app trying to add a social network.

Is there really that much interest in paying friends electronically? I have just never had much reason for paying friends or accepting payment from them.

Seems like this is more about paying strangers, including possibly retailers.

Re: Introducing Snapcash

#169

Post by Negitivefrags »

jpmattia wrote: post #155
Negitivefrags wrote: post #139

Earlier quoted context omitted.

The merchant has to buy (or rent) an EFTPOS terminal. The bank also charges the merchant a setup fee to connect your terminal to your bank account. Once that has been done there are no more fees. You have to look at the way it evolved. Because this is a service offered to customers by each bank in competition with each other, the competition drove the price per transaction to zero.

> the competition drove the price per transaction to zero. So the customers are paying. The banks just build it into the banking fees. It's not like that infrastructure is free.

I think it's worth remembering what job the bank is supposed to have.

The bank is supposed to make it attractive for you to give them your money so that they can then lend it to others or invest it however they see fit to make a profit. Remember, you are doing them a service by handing them your cash, not the other way around.

If the price for them is to create infrastructure for payments offered free of charge in exchange for being allowed to have access to your money than that is a price that they should be happy to bear.

In NZ banks there are generally no monthly fees for personal accounts and no fees for transferring money to others. I would generally expect to pay zero bank fees at all so long as I'm not going in to overdraft. I'm not saying that everything is 100% sunshine and roses, but certainly that is the minimum I should expect the bank to do in order to earn the right to hold my money.

Re: Introducing Snapcash

#170

Post by kungfooguru »

adventured wrote: post #148
jordanthoms wrote: post #112

Meanwhile, everybody outside the US is trying to figure out how it's taken so long for easy person-to-person payments to happen there. Here in NZ, you've been able to pay directly to someone's bank account number for free for as long as I can remember, and my bank introduced payments to mobile numbers, facebook accounts, and email addresses 3 years ago. (Oh and it's totally safe to broadcast your account number to ev…

It's primarily a regulatory problem with how the US financial system is set up and overseen by the Federal Government. It's a hyper regulated industry. Trying to do anything even slightly different in the world of moving money, banking, finance etc is simply a nightmare. Payment innovation would have been drastically faster, were it not for the obscene regulations that are in place at both the Federal and State level…

So Europeans have better credit cards than us because they have less regulations? And New Zealanders have easy peer to peer transfers because of what less regulations?

And all of this could be more easily done by getting rid of banks except for a single federal bank.

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