Post by Zilvinas Bareisis
A couple of weeks ago, Facebook announced it would bring P2P payments to its Messenger platform for customers in the US. According to a Finextra article:
“To send money through the free new feature, users start a message with a friend, tap a ‘$’ icon, enter an amount, and then hit the pay button. The first time a payment is made, people are prompted to add their Visa or MasterCard debit card details. For subsequent payments, users have the option of creating a PIN. To receive money sent to them, recipients open the conversation and tap ‘Add Card’ in the message and – the first time – add their debit card.”
Facebook’s announcement should not come as a surprise – rumours of a possible entry into payments have been swirling around since David Marcus, former CEO of PayPal, joined Facebook to run its mobile messaging business. Many other social platforms, such as Snapchat and Line have introduced P2P payments capabilities, while PayPal’s Venmo, a very popular P2P service also places social as a key element of its value proposition.
At Celent, we have been talking for some time about “contextual payments”, where payments are embedded deeply into the overall context of the customer’s activity and becomes a seamless part of the customer’s digital and physical experience. Uber and AirBnB apps are often given as examples of such contextual payments. Facebook is also a provider of a unique digital experience – a social community exchanging messages, photos, and videos. Extending the service to the exchange of money is a natural next step.
Consumer P2P payments are notoriously difficult to monetise – most services are free for consumers with providers charging fees typically only when loading funds from credit cards. However, if Facebook can persuade customers to register their cards, more commercial opportunities are likely to follow. The company already has a powerful analytical platform, which can help merchants reach consumers with targeted messages. Back in July 2014, Facebook said they were testing a “Buy” button, which would allow customers to buy goods directly from Facebook.
Of course, Facebook is a global platform with users all over the world. Bringing P2P to its global community would represent a really interesting opportunity, albeit with significant regulatory and technical hurdles. Only time will tell the extent of Facebook ambitions. In the meantime, the US consumers are getting spoiled with choice on how to send each other money.