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Snapcash and Venmo?

In recent news, the mobile application, Snapchat, has announced a new service called ‘Snapcash’. Partnering with the payment-processing firm, Square, users can now send money through snapchat direct messages. This new product seems novel in that it is now easier than ever to pass money quickly to friends without having to open your wallet. However, this idea, of payment sharing, has been done before with the mobile application called Venmo.

Snapcash has entered the market in direct competition to Venmo; now the battle has begun to see who can take over the market for mobile payments. This concerns the idea of a network effects as, in this case, positive externalities. Venmo, an application devoted solely to payment sharing with friends, relied on its growing size of its user base for its users to find the application useful. Snapchat, however, already has an enormous user base that now can use Snapchat to both send pictures and money. The question is, will Snapchat beat out Venmo entirely or will the Snapcash service fail to catch on?

Source:

http://www.bbc.com/news/business-30091550

 

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