Finance and Social Media: How Facebook Wants to Turn Messenger into a Payment Platform
Odds are when you think of social media, finance and commerce are not the first words to cross your mind. Undoubtedly, you think of photos or videos posted by family and friends.
Soon, many may think of it as a way to send money.
Facebook has already confirmed that it is seeking to turn its Messenger platform into a peer-to-peer (P2P) payment and e-commerce tool. Messenger added P2P payment functionality in June 2015. However, users have taken their time in warming up to it as a payment platform. Now, Facebook is ramping up its efforts.
In reality, this is nothing new. China’s preeminent messaging app, WeChat, has offered peer-to-peer payments and e-commerce since 2014. It is a business model that Facebook, seemingly, would like to emulate.
Messenger boasts 800 million monthly active users (MAUs) while WhatsApp, another messaging platform that is owned by Facebook, leads the category with 900 million. Those numbers alone make it easy to understand why Facebook is looking to jump into the e-commerce sector.
A major difference between Messenger and WeChat, however, is the cost of texting. According to Bank Innovation, text message plans cost 26 times more in China than they do in the U.S. That has driven Chinese users to readily adopt WeChat as a part of their daily routine, thus making the transition to using it as a payment platform theoretically easier.
It hasn’t even been a whole calendar year since Facebook turned Messenger into a standalone app. The decision was initially met with some unhappiness. However, it seems to have worked as the app grew from 200 million MAUs in August 2014 to 700 million in June 2015.
While Facebook has succeeded in getting users to download and interact with the app, it remains to be seen whether they will view Messenger as a safe and simple place to transfer money. Statistics say that a growing segment of the population are comfortable with mobile P2P payments. According to the Bank Innovation article cited above, 40 percent of millennials made a mobile P2P payment in 2014.
It is certainly a development to keep an eye on. If Facebook is able to duplicate the success of WeChat, Messenger could become a viable option for retailers. It could also be a new way for banks and credit unions to reach a younger audience. Only time will tell, but by the time 2016 comes to a close, we may be looking at social media platforms in a whole new way.
[Photo credit: Got Credit]
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