The mobile payment trend is growing at a rapid pace, with Forrester Research estimating that this will nearly triple in volume from $52 billion last year to $142 billion by 2019. With such a vast potential, it may come as no surprise that Facebook has made the move into this space, complete with half of its users (745 million people) sign on via phone or tablet.
The social network giant announced on Tuesday the new feature for Messenger that lets users send and receive money, which will be rolled out to users in the US over the coming months across iOS, Android and desktop.
The way forward for payments?
It’s been common practice for people to pay each other for things like splitting the bill when eating out or paying rent, “so why don’t we finish those conversations in the same place we started?”, reasoned Facebook’s payments program manager, Steve Davis.
This makes sense, but how does it work? Users of the platform can add their debit card information (rather than credit cards, a decision made to help minimise fraud and avoid fees) in Messenger’s settings, then send payments via messages with friends. By selecting the ‘$’ icon in the row about the software keyboard, users will be able to tap ‘Pay’.
Those on the receiving end will open up that message and accept the payment went prompted – this make take up to three business days to process, as with bank deposits.
Up against tough competition
All this sounds very well but let’s not forget mobile payment is becoming a crowded space. Snapchat launched Snapcash in November, which lets its users pay each other inside the app, while Venmo is a Paypal-owned app that is particularly popular with teenagers and those in their early twenties. Barclays PingIt is another mobile payment service allowing people to send and receive money just using a mobile phone number…it’s all becoming so accessible.
Then there are the concerns about sharing banking information, particularly within a network used for sharing amusing videos and mundane statuses. However, the software and equipment are PCI compliant, the same security standard applied to credit card transactions. An anti-fraud team are on hand to track payments for any suspicious or fraudulent transactions, while user information is stored in a secure environment separate from the rest of Facebook.
Facebook’s gains with new move
The approaching payment feature is set to be a boost for Facebook, particularly as, compared to its ‘competitors’ in the market, none of those have the social network’s potential reach and scale. Being the second-most trafficked site domestically and globally (after Google) and with US adults spending an average of 21 minutes per day on the channel (6% of their time online), according to eMarketer, this addition will certainly encourage users to stay on the site for longer periods of time, making it more ‘sticky’ and going beyond simply just a communications tool.
In fact, this could put Facebook ahead of its competition if users are less likely to resort to outside services . Potential opportunities for generating revenue will also be opened up as a result of users sharing their payment information within the platforms, which brands and marketers should be aware of.
As always, time will tell whether the ability to send and receive payments on the same platform users share updates with friends and family will take off and be a success. We see it as another innovative move in the market, allowing payments to be even more accessible at our fingertips. However, is this a step in the too ‘social’ direction? Tweet us and let us know your thoughts!