They also aren't currently sending each other money. I hate to be a naysayer to what I think is a pretty cool product, but Snapchat's terrible security reputation is well-deserved. But also this isn't very much differentiated from sending money with Gmail, Square, etc.

I think the point is that they ARE sending eachother money, just in less efficient ways. Looking at how people use snapchat it isn't as much about ephemeral as it is about speed. It's much easier to send a picture to someone in snapchat as the flow is better, and it doesn't leave a stupid photo on your phone (and on several cloud backups) that you didn;t want to stick around forever (e.g. check out this awesome car, you don't need a copy of that)

I thought this move was awesome. In my 17-25 year old life my friends and I were constantly owing eachother money for random things. If someone could pay me back right there for no charge that would have been my dream. We debated building an app for it at one point, just to tally who owes who what. It was a big enough issue I carried an excel doc but not enough to go out and search a standalone app for it. If the function is easily integrated into an app I use for something similar, however, I feel like I may pick it up.

Also teenagers aren't using gmail or square, etc. now so if snapchat can take them over before university they have a better chance of winning, imo. I do believe this is a market to be won going forward, at least in that 17-25 demographic (also why bitcoin got me excited, no fees for small transactions is a REQUIREMENT for person to person payments).

> and it doesn't leave a stupid photo on your phone (and on several cloud backups) that you didn;t want to stick around forever (e.g. check out this awesome car, you don't need a copy of that)

You should probably research Snapchat's history and behaviors.

the OP's argument sounds more like one of convenience though -- I don't really care if there's a cached copy of my awesome car picture somewhere.. I just don't want to see it in my main photo app.

How are they able to transact with Visa and Mastercard without fees?

I assume any "no fees" clause means that they're not taking fees at this time. It doesn't mean "no fees anywhere in the system". So there very likely is a 3% fee to the user, just not from snapchat.

Even with their money?

Most of these users never used Paypal so if one of their friends tells them they can send money over Snapchat they probably won't think two seconds about it.