Social networking company, Facebook, announced today that American users of its Facebook Messenger app would be able to link their debit cards (MasterCard or Visa) to the service and use it to transfer/send/receive money to one another.
The app now features a small ‘$’ sign above the keyboard which will allow users to access the payment interface. They can then enter the amount and tap pay to send money.
The new payments feature is rolling out in the coming months in the US across Android, iOS, and desktop. No details for other countries yet.
Comment by Eden Zoller, Principal Analyst, Consumer, Ovum below:
Facebook has introduced a person-to-person (P2P) mobile money transfer feature to its Messenger service. This is a shrewd move. Facebook Messenger is a popular application, and the convenience and simplicity of mobile money transfers offers a tangible benefit to consumers. Although the new feature is initially confined to the US, Facebook Messenger has a large and growing international base. In November 2014, 500 million people were using Facebook Messenger, and Ovum expects the app to reach more than 890 million users by the end of 2015. If the m-payments feature proves popular it will increase consumers’ use of and loyalty to Facebook Messenger, which is important, given the intense competition in the social messaging space. If this approach is successful, Facebook may add m-payment functions to WhatsApp.
Facebook is not the only player to have introduced m-payments into messaging applications. In fact, a host of its rivals, including PayPal-owned Venmo, Snapchat, Line, WeChat, and KakaoTalk have already done so. Moreover, several of these players have added m-payment services beyond P2P transfers and will no doubt look for further enhancements now that Facebook is on the scene. A further challenge for Facebook is trust; it has built the platform and cannot afford to have any teething problems when it comes to security and privacy.
The huge growth in Facebook’s advertising revenues, particularly those from mobile, means that it is under no immediate pressure to monetize payments directly. However, there is no doubt that it wants to do so in the longer term. It has been experimenting with payments for a number of years, gradually building its capabilities in this area, albeit with mixed results. For every robust initiative such as the “buy” button in ads it has made false steps such as Facebook Gifts and the now-defunct Facebook Credits virtual currency.