Bundling payments with Messenger makes sense for Facebook, given its mammoth network
From PayPal to Google Wallet to Apple Pay, the online payments universe has many big players. And now Facebook has joined the fray, with an embedded payments service in Facebook Messenger (part of the facebook.com website on desktop and a separate app on mobiles). By tapping on a “$” button now included in Messenger, users can transfer money from linked Visa or Mastercard powered debit accounts to their Facebook Friends.
Facebook scores over dedicated payment services like Google Wallet or PayPal by making payments a part of its frequently-used messaging service rather than a standalone app. Users have to use a core Facebook product for peer-to-peer (P2P) payments, thereby sustaining active user numbers that are core to its ad revenue strategy. For Facebook—which struck out with its last two major products, the news app, Paper, and the ephemeral messages service, Slingshot—P2P payments are an opportunity to leverage its mammoth network of 1.39 billion monthly active users for a growing digital service segment. However, the Engineering & Technology magazine warns that given the expected volume of transactions, Messenger could become a target for data theft. Facebook, though, has introduced security measures like in-app, user-generated payments passcodes and fingerprint-based Apple TouchID authentication (for users on the iOS platform). How regulatory systems treat the service would perhaps shape its uptake. In India, as per a report in the Hindu Business Line, RBI has cautioned against it, citing data security concerns. In China, competitor Apple Pay has run afoul of the regulators, though, given how the country has been moving to protect the interests of home-grown MNCs, the move has more to do with securing the country’s market for chat-app monoliths (with bundled taxi-hailing, P2P payment, e-tail payment, etc, services) like Tencent’s WeChat.