Are P2P Payments On Facebook Messenger Just The Beginning?
Facebook has been involved in payments in one form or another for about eight years. It was also clear that when the company hired former PayPal executive David Marcus last year that it was going to move more broadly into the space. It’s no surprise that the company has announced integration of peer-to-peer mobile payments into its […]
Facebook has been involved in payments in one form or another for about eight years. It was also clear that when the company hired former PayPal executive David Marcus last year that it was going to move more broadly into the space.
It’s no surprise that the company has announced integration of peer-to-peer mobile payments into its Messenger app. Broadly speaking it’s pretty similar to GMail payments or Square Cash. It’s a debit card transaction and for now it’s US only:
The first time you send or receive money in Messenger, you’ll need to add a Visa or MasterCard debit card issued by a US bank to your account. Once you add a debit card, you can create a PIN to provide additional security the next time you send money. On iOS devices you can also enable Touch ID. As always, you can add another layer of authentication to your account at any time.
The money is immediately transferred. However Facebook says it can take up to three days to receive the funds depending on the underlying bank’s policies.
Under the assumption that Messenger payments will ultimately roll out globally, it could become quite successful (for different reasons in different countries) and justify Messenger’s existence as an independent app. A more interesting question is what might come next.
A broader payments capability could enable e-commerce on Facebook or provide consumer spending data to be factored into Facebook ad targeting. A bit more speculative is the idea that Facebook could enter Square’s territory and start providing scheduling and payments services to small businesses.
Recall that just last week Facebook announced the acquisition of TheFind, publicly discussed as a way to improve Facebook Ad targeting and relevance. However TheFind is a shopping site that could provide Facebook with an immediate e-commerce marketplace capability. It remains to be seen whether that happens or whether the company simply ignores that aspect of the business.
Mobile payments would obviously be supportive of e-commerce. It’s also not inconceivable that Facebook would get into in-app payments or offline mobile payments in physical stores at some future point. Marcus has experience with all these things.
All these payment scenarios also raise the prospect of “closed loop” transactions and the ROI reporting and optimization benefits they imply.