Wednesday, March 18, 2015

Show Me The Money

Over the course of the semester, we have talked multiple times about the Facebook messenger app and the ability for Facebook to leverage its vast user base in avenues beyond their newsfeed. Facebook this week announced that through its messenger app, American users would be able to link their debt cards to "message money to one another just as easily as they send a snapshot or text." While not completely unexpected by Wall Street analysts, the peer-to-peer payments market presents a really good opportunity for Facebook to enter a fairly undeveloped market.

According to the New York Times article, not only is the peer to peer market a ripe one to enter, but the ability to have direct access to debit cards opens many different avenues for Facebook to explore and this is truly where there will be a ROI. "Facebook could use this as a back door to get people’s debit cards to enable the buy button” which will afford its users a seamless integration to purchase things they desire. This is coupled with the fact that Facebook has actively sought to increase their foothold and increase penetration with their messenger app and this is one way they plan to leverage this platform.

The company’s Messenger app is one of the largest platforms in the world, with more than 500 million monthly users. And last year, Facebook spent nearly $22 billion to buy WhatsApp, a separate messaging platform that now counts more than 700 million active users globally.
As someone who is an active user of the only true rival in this space right now, Venmo (screen shot below), a mobile payment app owned by PayPal, I would be happy to switch if the service were easier or in the case of Facebook, makes a seamless transition from having a conversation with a friend to sending them money. My concern, both via Venmo or the new Facebook App is the direct linkage to my debt account. I understand there are security settings, but having direct access to my debt account does concern me. Its the exact reason that I never use my debt card as a credit card for the fear that my account information can be taken. The other big rival would be Apple Pay, but at the moment, it doesn't have the peer to peer capabilities. Overall, I think this is a positive move for Facebook and a tangile way to account for the sizable investment it has made in the messaging space and as its seeks to become more than a social media outlet, this is a logical foray into something  that leverages their 1.3B users.

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