Pay your own way with Facebook Messenger

WEB_Facebook_MessengerFacebook has announced users of its Messenger app in the US will be able to send and receive money from contacts for free through a new payments feature.

This follows other recent social media and mobile payment integrations such as Snapcash in the US, which allows Snapchat users to send money to friends via the app, and Barclay’s recent incorporation of Twitter handles to its Pingit money transfer app in the UK.

By choosing not to partner with payments behemoth PayPal, Facebook has chosen to utilise its sparse experience across gaming and the old credits system to build their own solution. The benefit to users is simplicity of use, without having to share details of bank accounts etc with each payee.

There is additionally the convenience of combining conversations and actions in one place, as opposed to needing to open a dedicated payment app – users need not leave the app. The potential threat is around privacy and security as users need to link their bank account details to their social media account which some users may be reluctant to cede, however protected, to Facebook.

Meanwhile, the significant advantage to Facebook is the ability to retain users within their eco-system for longer. By diversifying and finding another reason for users to engage with the network, Facebook is increasing its utility and how it is ingrained within its user’s lives.

This news also comes rapidly after Facebook’s acquisition of e-commerce site, The Find. The combination of owning a successful e-commerce site and launching a payments platform strongly suggests that Facebook will be doing a lot more in the e-commerce space over the coming months.

There is no real money to be made in the mobile payment business unless particularly large amounts are handled. Instead, this value-add for Messenger users will likely increase the popularity of the service as well as feed into a larger e-commerce play. Richer data for ad targeting and opening up the platform for s-commerce payments will translate this new feature to revenue.

In terms of competitors, the main advantage is the sheer userbase of Facebook, versus the likes of Venmo (which doesn’t publicise user volumes) and Snapcash whilst Popmoney is a fee-based money transfer service. Apple Pay and Google Wallet will clearly have massive reach but are not cross-platform, which is, however, a bridge that Facebook Messenger does cross.

The added benefit is Facebook’s potential to replicate the payment feature into WhatsApp, which has approximately 200 million more active users globally than Facebook, much like WeChat’s Payment system.

The combination of a social network feed and payment platform has already been successfully tested by Venmo as the app allows your ‘public’ payments to be liked or commented on. Users are more sensitive when it comes to money but Facebook has already been involved in the socialisation of location and photos and payment is next on the target list.

If this fits into a larger e-commerce scheme remains to be seen.

Paul Kasamias, head of biddable media, Starcom MediaVest Group

  • Adam Brot

    The first time that you send or receive a payment with Messenger, you’ll need to add a Visa or MasterCard debit card issued by a U.S. bank. Once you add a card, you can create a PIN for additional security, and on iOS devices you can also enable TouchID. Additionally, you can turn on login approvals, a setting that will require you to enter a security code each time you access your Facebook account from a new computer or mobile phone.