Andrew Aude, a Stanford computer science student, recently made revelations about payments as an in-app feature in Facebook Messenger. He used an iOS app exploration developer tool called Cycript to capture some screenshots and a video, which suggest how the payment feature would actually work when made public. In addition, Jonathan Zdziarski, a security researcher had actually discovered the presence of payments code in the Messenger app last month.
The news was first released by TechCrunch and it talks about how the payment feature might actually work on the Messenger UI. The Messenger’s payment option will let users share money similar to the way they share media content such as photos. Users can either use their payment cards which they have stored on file with Facebook or add new debit card information. There is also an add-on security feature which involves the use of a PIN code.
*According to the leaks from different sources
Here is the actual tweet by Andrew Aude highlighting the screenshots he had captured:
— Andrew Aude (@andyplace2) October 4, 2014
The video captured by Aude shows that a user can send money by using a button to initiate the payment and simply enter the amount. The transactions are kept private and the transaction info doesn’t get published to the News Feed. Per Aude, the way money actually gets transferred seems similar to Square Cash. The code that has been unearthed reveals notes about PayPal but Aude didn’t come across PayPal as a payment option.
Facebook has evidently set its sights on creating an entire payments ecosystem. Earlier this year, David Marcus, who until recently led PayPal’s online payments service, had joined Facebook to head their messaging products. Since then, it has been believed that Marcus’s expertise might someday bring a payment solution to Facebook’s messenger. This recent news shows what Facebook’s real intentions were when they successfully added him to their team.
Speculations had been rife in the past on how Facebook would eventually introduce payment features. Who can forget the recent buzz around the Facebook “Buy” button that has been making news for quite some time? Facebook had begun testing the Buy button in July this year. The button is currently visible at the bottom of sponsored ads, news feed ads and page posts. It is currently being supported by a limited group of small and medium sized U.S. businesses. The Messenger app would provide another platform to merchants to boost their sales. According to the note, the feature of payments between more than 2 participants will be added later.
The transaction works using an ACH transfer to the recipient’s account. Also, the payment transactions seem to have been kept private from the user’s friends. Sounds so un-Facebook doesn’t it?
However, it has not been determined whether the service will be charged, or Facebook will simply run it for free to drive usage of the Messenger app that has seen a decline in growth in the last couple of years.
At Facebook’s Q2 earnings call earlier this year, CEO Mark Zuckerberg had commented: “There will be some overlap between Messenger and payments, and it will be part of what will help drive overall success.” The Messenger app processes 12 Bn messages a day and boasts of 200 Mn monthly active users. This active user base itself offers a huge potential for the Messenger app when enabled with payment options.
Facebook has also made forays into the payments market through some other initiatives. Facebook had applied for an e-money license in Ireland for P2P money transfers in Europe. Earlier, Facebook had also introduced “Facebook Credits” for users for buying apps on Facebook. There are already some banks who offer Facebook-based money apps. The list includes First National Bank of South Africa, CommBank, ICICI, RBC and ASB.
Several scenarios seem possible for Facebook now:
- Facebook becomes an international bank – an e-money bank with or without collaboration with traditional banks around the world, providing a singular platform for the world’s different currencies and making it easy for users to save, invest & transfer money or conduct commerce.
- Facebook becomes the biggest e-commerce player on the planet, with Facebook pages acting as virtual retail outlets. Payment methods are integrated to complete commerce transactions. Consumers can use Facebook’s Messaging apps to get in touch with sellers to find out more about products and discuss terms of payment. Also, it can work conversely for sellers, making Facebook a big platform for negotiating and making deals.
- Facebook becomes the biggest remittance giant in the world, providing high-volume, secure cross-border payments day after day – like a digital version of Western Union.