Facebook Messenger Adds Mobile Payments Function

FB PaymentsFacebook has added peer-to-peer payment functionality to its Messenger app.

Enabling users to send money to their friends, the new feature will be embedded directly into conversations in-app, through the addition of a $ button.

Money is transferred immediately, though as with any bank deposit, there may be a processing period of up to three days.

In order to send or receive money, users will have to store their Visa or MasterCard debit card details as part of their Facebook account, which may raise some concerns over security. Its possible – though apparently not mandatory – to set up a PIN to secure future transactions, or use the Touch ID fingerpoint scanner on iOS devices.

Facebooks announcement also points out that this isnt the first time users have stored their payment details with the social network – it has been processing payments since 2007, and now handles over 1m transactions daily.

“Incorporating security best practices into our payments business has always been a top priority,” reads the announcement. “We use secure systems that encrypt the connection between you and Facebook as well as your card information when you ask us to store it for you. We use layers of software and hardware protection that meet the highest industry standards.

“These payment systems are kept in a secured environment that is separate from other parts of the Facebook network and that receive additional monitoring and control. A team of anti-fraud specialists monitor for suspicious purchase activity to help keep accounts safe.”

Facebook says the feature will be rolling out in the US over the coming months across Android, iOS, and desktop.

Ovum comments
eden-zoller-660x825“This is a shrewd move,” says Eden Zoller, principal analyst at Ovum. “Facebook Messenger is a popular application, and the convenience and simplicity of mobile money transfers offers a tangible benefit to consumers. If the mPayments feature proves popular, it will increase consumers’ use of and loyalty to Facebook Messenger, which is important given the intense competition in the social messaging space. If this approach is successful, Facebook may add mPayment functions to WhatsApp.

“Facebook is not the only player to have introduced m-payments into messaging applications. In fact, a host of its rivals, including PayPal-owned Venmo, Snapchat, Line, WeChat and KakaoTalk have already done so. Moreover, several of these players have added services beyond P2P transfers and will no doubt look for further enhancements now that Facebook is on the scene.

“The huge growth in Facebook’s advertising revenues, particularly those from mobile, means that it is under no immediate pressure to monetise payments directly. However, there is no doubt that it wants to do so in the longer term. It has been experimenting with payments for a number of years, gradually building its capabilities in this area, albeit with mixed results. For every robust initiative such as the buy button in ads, it has made false steps such as Facebook Gifts and the now-defunct Facebook Credits virtual currency.”