Online Payment has been a
dream of Facebook for eight years. It was also clear that when the company
hired former PayPal executive David Marcus last year that it was planning to
turn that dream into business.
Not surprisingly, Facebook has announced launching of peer-to-peer (P2P) mobile
payments into its Messenger application. Honestly, it works basically like GMail
payments or Square Cash that only supports debit card transactions, and
for now only in US.
According to the announcement, “The
first time you send or receive money in Messenger, you’ll need to add a
Visa or MasterCard debit card issued by a US bank to your account. Once
you add a debit card, you can create a PIN to provide additional
security the next time you send money. On iOS devices you can also enable Touch
ID. As always, you can add another layer of authentication to your
account at any time.” Theoretically, the money is immediately transferred.
However Facebook indicates that it can take up to three days to receive the
funds depending on the underlying bank’s policies.
Given the popularity of Facebook around the world, it is
reasonable for us to say that this mobile payment method will ultimately
roll out globally and it could become quite successful (for different
reasons in different countries). Beyond that, a more interesting question
is what might come after the P2P mobile payment.
Obviously, such a powerful payments capability could enhance
e-commerce on Facebook or provide consumer spending data to Facebook ad targeting. In just last week, Facebook announced the acquisition of TheFind,
publicly discussed as a way to improve Facebook Ad targeting and relevance.
However, TheFind is a shopping site that could provide Facebook with an
immediate e-commerce marketplace capability. It still remains to be seen
whether e-commerce is the next target that Facebook is moving towards. Mobile
payments would obviously be supportive of e-commerce. It’s also not
inconceivable that Facebook would get into in-app payments or offline mobile
payments in physical stores at some future point. Marcus has experience with
all these things.
All these payment scenarios also raise the prospect of “closed
loop” transactions and the ROI reporting and optimization benefits they imply.
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