With job posting, Snapchat hints at reinvesting in payments

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.”

How BNP Paribas is targeting millennials on Snapchat

Banks are testing the waters on Snapchat to reach its young user base. This week, BNP Paribas, France’s largest bank and one of the world’s biggest, went full steam on Snapchat through a global partnership with the app’s parent Snap Inc., the first such arrangement for a European bank.

“The plan is acquire more millennials for our employee base and understand how we can interact with this new generation,” said Romain Chapron, the bank’s digital media partnerships manager.

The challenge with Snapchat is to create content that holds users’ interest. BNP is featuring its employees in short videos that show potential recruits what it’s like to work at the bank and doing Snap ads to promote the bank’s products. It’s also using lenses and branded geofilters that highlight sponsored events such as the French Open tennis tournament. The campaign will run for a year, and the videos will be posted daily on BNP Paribas’ Snapchat channel. The company said its ads will be posted in live stories and Discover channels, and where relevant, cross-posted to Instagram, YouTube and Facebook.

The bank has maintained an active presence on Snapchat over the past year, and as part of recruitment campaign last fall, churned out weekly videos from its Snapchat channel. The videos emphasized work-life balance and fun. The bank also took part as an influencer in #CampusStories, a Snapchat guide for students studying abroad.

BNP Paribas Snapchat video posted to YouTube

For the Snapchat partnership, the bank is producing some of the videos in-house, while using agencies including Publicis and Havas for others.

“We have to deploy a fun approach in tone of voice, which is something new for us as a bank, and we have to be very creative,” Chapron said. 

BNP Paribas launched similar arrangements with Facebook, Google, LinkedIn and Twitter two years ago.

It’s smart move for bank to develop a presence on Snapchat before going deep on the platform, analysts say.

“Millennials have been very guarded with brands encroaching on the Snapchat space, and brands have to very careful on how they engage on the platform,” said Christopher Barnes, managing director of Market Strategies International, a market research firm that focuses on the financial services sector. “They’ve done a good job producing relevant content, and again, ramping up.”

Snapchat’s upcoming IPO as a refrain in the love song banks have with social media

Financial institutions and social media companies go together like [insert your favorite alliterated pairing … or rama lamma lamma ka dinga da dinga dong]. Social media companies, in spite of their possible role as revolutionary vehicles (think Twitter and the Arab Spring) and decentralized platforms for social change (think Facebook and the Ice Bucket Challenge), are very much dependent upon standard bank services.

Both Facebook and Twitter have great need of bank services, for investments, employee payments, and offshore get-out-of-tax-free accounts, just to name a few.

Banks, on the flipside, cannot really get by without social media. Firstly, because by 2017 the world is expected to have 2.5 billion social media users, and banks won’t want to miss that branding and marketing opportunity. And it is a real opportunity: Avidia Bank, for example, found that its digital marketing strategy to promote smartphone cash withdrawal app ‘Cardless Cash’ led to a 13 percent increase in mobile app enrollments and an 83 percent positive user sentiment for Cardless Cash.

This interdependent love story between banks and social media platforms is being played out with Snapchat. Snapchat needs banks to lead its upcoming IPO. Meanwhile, banks are exploring exactly how they can benefit from being present on Snapchat. Bank of Ireland, for example, is using Irish Snapchat superstars to connect with younger customers, while JPMorgan Chase has experimented with the platform as a recruitment tool for millennial talent.

Not everything is peaches and cream up at the bank and social media villa, though. While banks might be ready to go steady, social media platforms are playing fast and loose when it comes to P2P payments. Millennials have the highest user rate of P2P payments (32 percent as opposed to 22 percent in the general U.S. public), and Facebook’s free P2P payment service is right at their fingertips.

While many banks are getting in the P2P payment game via clearXchange, millennials are already all over Facebook. A 2016 study by Ipsos found that 83 percent of men and 91 percent of women aged 20-35 in the U.S. have a Facebook account. And, like Facebook, Snapchat has its own free P2P payment service called Snapcash, powered not by a bank, but by Square.

Social media might be unfaithful to banks. Heck, these firms may be trying to become their own banks. But it seems unlikely that banks will ever give social media up, let them down, or run around and desert them. Why? Well, back to those 2.5 billion social media users. In terms of Snapchat, the statistic that really matters is that over 60 percent of U.S. 13- to 38-year-olds are Snapchat users.

Oh, Snap.

How to sell insurance to young people on Snapchat

selling insurance on snapchat

There are certain youth-focused brands that no one is surprised to see on Snapchat, whether it’s behind the scenes footage from Marc Jacobs, or sponsored lenses from Taco Bell. What you don’t expect to see, though, are snaps from insurance companies.

But Danish insurance company Alka has had success on the platform, having just finished a three-month campaign posting weekly Live Stories and competitions — reaching a demographic it’s previously struggled to communicate with.

“Insurance and young people don’t go hand in hand, they don’t really see the point in spending the money,” said Hans von Haffner, client director at ad agency Fireball, which was behind the campaign. “And Alka isn’t an interesting brand to follow, unless there is a perk involved, so we wouldn’t use paid-for advertising on Snapchat.”

In Denmark 48 percent of people between 12 and 29 years old are using Snapchat every day, it’s the fastest growing social media platform, according to Denmark Radio’s report on Danish media consumption. Alka’s new €12 monthly plan ($14), covering all personal belongings for 21-30 year olds, needed to reach that audience in an organic, non-intrusive way. “We thought, ‘how can we not interrupt the users while still getting leads?’” Fireball’s community manager Ulrik Nøhr, told Digiday.

Each Wednesday from January to April, the team on the campaign — a community manager and two creative directors — brainstormed the short video narrative, storyboarded and shot it before publishing at around 2 p.m., keeping it quick and simple. In total they shot 12 30-second films, all centered around someone losing or having an item stolen; a bike, a laptop or a handbag.

Followers who took a screenshot of a orange item in the film (Alka’s brand color) and sent it with their name and number were eligible to win a prize — generating 774 leads for Alka in the process.

“While younger people may not own lots of possessions, the ones they do they have a strong emotional attachment to,” said Nøhr. “The stories had to connect with the Snapchat platform; when those things disappear, like everything does on Snapchat, it sucks not to have insurance.”

selling insurance on snapchat
stolen flowers

While 774 names and numbers may be a relatively small number, the engagement was high. Half (49 percent) of them interacted with the brand; Alka’s agency team made sure they responded to each submission. More importantly, they bought insurance. Alka was tight-lipped on the conversion numbers, though, adding it was more “efficient conversion” than other direct marketing or social media efforts.

“We were unsure how many people would engage, the fact we got anyone to follow us was a big step,” said Alka marketing consultant Thomas Flygare, “the way they responded to interactions was amazing to see.”

Like with all Snapchat Stories, a key challenge is getting people to follow the brand. Alka has a weak social media presence, with a handful of Twitter followers and 14,000 likes on its Facebook page. Instead it worked with Danish trade unions, like HK, to promote the Snapchat campaign, and ran Facebook ad campaigns targeted at union members.

This summer Alka will get back on the platform, running competitions around festivals and summer holidays, highlighting situations where it can hurt to not have insurance.

A version of this article originally appeared on Digiday.

Photo credit: AdamPrzezdziek via Visual Hunt / CC BY-SA