Remember Snapcash, the payments offering by the popular disappearing message app Snapchat that never seemed to take off? Now, parent company Snap is seeking a new payments product manager, suggesting a reinvestment in payments.
According to a job posting, Snap is looking for someone to build and manage relationships with financial services and technology providers, create new payments and commerce opportunities, devise long-term strategies for internal tools, data and revenue-related products and lead a team from a payment product’s conception to launch.
Snapcash was introduced in late 2014, and Snap hasn’t shared Snapcash users stats or transaction volume, so it’s unclear how it’s actually performing. Snap did not respond to interview requests by deadline.
“There is no indication of what kind of payment volume they’re doing, and it’s not a good sign,” said Ron Shevlin, director of research at Cornerstone Advisors and author of Smarter Bank. “When you’re successful, you like to tell the world what you’re doing, like Venmo does, because it’s impressive.”
Unlinke Venmo, which launched in 2009, Snapcash didn’t have a clear value proposition. The vanishing concept at the heart of Snapchat’s brand doesn’t translate well to financial transactions, and there was a mismatch between what people used Snapchat for and what they want from payments, Shevlin said.
“They want and need an electronic paper trail and Snapchat doesn’t do that,” he said. “The whole payments strategy from Snapchat was a bit of a stretch because it wasn’t a logical extension of what they were doing. It appealed to a demographic that was actually not making a lot of payments.”
Venmo, by contrast, easily became part of the lives of 20-somethings, who were eating out a lot and splitting the bill or had at least one roommate and could use it to split rent and other utility bills. It was free, easy and fun — three qualities not to be underestimated, Shevlin said.
Through a deal with Square, users can add a debit card, type a dollar amount into Snapchat’s text-chat feature, and hit a green “pay” button to send money to someone instantly. It’s effectively a white labeling of Square Cash. Your friend has 24 hours to accept the payment or else it’ll be refunded to you to make sure it didn’t disappear. Square declined to comment.
Snapchat’s search for payments expert suggests that something about the payments play is working, or that Snap is now trying to improve its value to users now that it’s gone public. Snapchat also faces mounting competition from Facebook, which hired PayPal president David Marcus in 2014 and launched payments through Messenger in 2015 and has lately been adopting Snapchat-like features for Facebook and Facebook-owned Instagram.
Facebook’s Instagram Stories has 200 million daily active users, Facebook reported earlier this week. Snapchat reported 161 million daily active users in February, an 82 percent decline since the launch of Instagram stories.
“[Snap] wants to become a more important platform in their customers lives and that Facebook hired the president of PayPal for its messenger platform clearly suggests these companies think payments is an important hole in their story,” said a payments expert at a U.S. bank, who asked to remain unidentified because employees aren’t allowed to comment on other companies. “Maybe they want to start e-commerce stores that Instagram has been quite successful in letting its users build.”
The source pointed to China’s WeChat as an example. Commerce is embedded deeply into the app, he said. U.S. platforms haven’t gotten there. They mostly allow people to talk, but not connect with businesses easily like WeChat does.
“Snap has always been the ‘fun’ platform,” the source said. “They need to get people to think of them as the core way to manage their life. Facebook with a public social graph has it, Snap doesn’t.”