May 28, 2015
This year in March, Facebook had launched a P2P payments system built entirely around the Messenger platform. Facebook’s P2P payments begins as a conversation within the Messenger app. Then, with the press of the new $ icon and the entry of an amount, one can send money that will arrive on the recipient’s listed debit card within seconds. The payments service was introduced to select cities in the US such as New York, Seattle, Portland and Austin, as reported by TechCrunch.
The first time a payment is made via Facebook P2P, the receiving party is prompted to add Visa or MasterCard debit card details in case a linked debit card does not exist beforehand. Facebook P2P payments basically involves debit card linking. The money is debited from the sender’s debit account and delivered to the recipient’s Facebook associated debit card.
Facebook recently made some changes to the payments service bringing in more useful features:
>> The dollar amounts in a Messenger conversation now get automatically hyperlinked. Upon clicking, these dollar amount links will start the payment. This way, the sender is able confirm the payment initiation.
>> Earlier, users weren’t allowed to make payments within a group conversation. Now, users can pay their peers individually without having to leave the group conversation.
The Messenger payments system already offers some other important features with regard to user authentication. Users will be prompted to set a passcode or use their Apple Touch ID on compatible iOS devices to confirm transfers, although one can opt out of this authentication process in the settings panel. As an added security feature, Facebook may ask users some extra security questions before a transfer can be authorized. Facebook is also employing a team of anti-fraud specialists to monitor suspicious purchase activity to keep user accounts safe.
Facebook is also developing the Messenger platform for m-commerce activities. It is expected that the payments capabilities would be incubated for the business side as well. But that is to be seen as the Messenger payment system only supports P2P money transfers and Facebook has not cited further plans oriented to commercial purposes.
A vast majority of Facebook’s 500 million monthly users are logged on to Facebook Messenger with about 80 million payment cards on file. Facebook does have an opportunity to become one of the biggest remittance giants in the world, providing high-volume, secure cross-border payments day after day like a digital version of Western Union. Moreover, the Messenger payments system could become a prominent threat to competitors such as Venmo, Square Cash, SnapCash and others.