The wildly popular mobile conversation app Snapchat has added a "Snapcash" payments option through a new deal with Square Cash, reports TechCrunch.

Snapchat filed trademarks for the payment system in July. The trademarks prepare Snapchat for peer-to-peer payments and payments to merchants and ecommerce. There's speculation that, in the future, the app could send users a merchant Snap or Story ad and enable them to purchase the product shown instantly via Snapchat.

Snapchat and Square are tight-lipped about their financial agreement. Snapchat has said it is interested in offering payment methods using credit cards or bank accounts, but Square only handles Visa and Mastercard debit cards currently.

Square Cash could beat out competitors Google Wallet, Venmo and other companies for the peer-to-peer payment market with the Snapcash deal. The photo messaging app has tens of millions of users who regularly use it with friends and family, and the new payment option could thrust Square Cash into the lives of consumers who would not have downloaded a finance app previously.

Peer-to-Peer Payments

In the case of Snapcash, person-to-person payments is a technology that allows consumers to transfer funds from their debit card to another individual's account via their mobile phone.

While none of the peer-to-peer payment services have gained widespread acceptance, the service is extremely helpful for splitting drinks, dinners, trips and more with friends and family.

How to Use Snapcash

U.S. residents age 18 and older can sign up by adding a Mastercard or Visa debit card. The sensitive information is securely stored by Square who will process the payment and send cash to your friend's bank account.

Consumers can use Snapchat's new payment feature in four easy steps:

1. Add a debit card.

2. Swipe into chat.

3. Type a dollar amount into Snapchat's text-chat feature. Snapchat realizes you're attempting to pay and changes the send button to a green Snapcash button.

4. Press the green pay button to send money instantly.

The cash will be held for the receiver until they sign up for Snapcash. The receiver has 24 hours to sign-up and accept the payment. If not, the cash will be refunded.

The feature is available on Android and is coming to iOS soon according to Snapchat.

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