After months of speculation, Facebook finally announced that they will soon be enabling online payments via their Messenger app. This feature will initially be available in the US, and will be free of charge for users.
According to Facebook, sending cash to your friends couldn’t be simpler. Open Messenger, select the dollar icon, enter the amount you wish to spend, and then press “Pay”. The money transfer is immediate, but it may take a couple of days before your bank makes the money available.
The first time a user sends or receives money, they will be prompted to enter a Visa or MasterCard debit card. This card can be protected by a password, or with Touch ID on an iOS device.
This is a natural development for Facebook, who already handle up to a million daily online transactions, via their games and advertisements. The question for online marketers is whether this is the first stage in a long-term development to create a fully featured online payment service.
Facebook is playing catch-up when it comes to mobile payments. Kenya’s M-Pesa mobile payment system has grown to become the largest mobile payment system in the world, with subsidiaries in other African countries, India and Eastern Europe. In China, WeChat (a messaging app) users have been sending money to friends via their phones since 2013. The Paypal-owned app VenMo is popular amongst millennials, and even Snapchat is keen to get a piece of the action. And no wonder – Forrester Research estimates that mobile payments will soar from $52 billion in 2014 to $142 billion in 2019.
For Facebook, enabling mobile payments helps keep users on their site for a longer period, and strengthens customer loyalty. Imagine seeing a link to a cool product on Facebook, ordering and paying for it, all without leaving the app. It could be incredibly effective for advertisers, as customers would be tempted to impulse buy, and we all know how easy that is to do!
Initially, the free service gives Facebook an advantage over other social media platforms. But it remains to be seen where the company will take this idea from here.
