There are such moments that everyone has faced when they think that they have a certain amount in their wallet, enough for that evening out. But when the time comes to pay up, you open your wallet to realize that some notes grew legs and walked away somewhere leaving you in an embarrassing situation. You genuinely don’t remember where you spent the cash but awkwardly apologize in front of everyone that you don’t have enough. You offer to hop over to the ATM, but someone insists on letting them cover it. You wish for the end of the world right then.
Now, you can simply say, “Thanks, buddy, let me text you the money.”
With Facebook (FB, Financial) launching its money transfer gateway, this will soon become a popular method. This peer-to-peer transfer can take place between two Messenger users at the click of a button. At the corner of the chat window, beside the emoticons, there will now be a dollar symbol. Click on it, put a figure and a message will be sent to the receiver. The transfer, however, may take three business days. For the first time, one has to use a debit card and the receiver must also provide their details for the sender to "Add." Most importantly, you won’t be charged for your transactions, as many as they may be.
How is the Messenger Pay different from the others?
This is, however, not a novel concept, and the method is based on the one used by gamers and advertisers. Although Facebook has categorically said that it is for personal use, and not for business transactions, it is hard not to see its potential.
When it comes to other forums which allow money transfer via texts like in PayPal's Venmo, Square Cash and SnapCash, the major difference is in their reach. None has as big a consumer base as that of Facebook and none is more popular than the latter. Since users are connected to their friends or family on Facebook, transferring money becomes easier and less of a hassle. With around half a billion people around the world using Facebook and around 500 million being connected on Messenger, the customer base is all set and ready.
Now let’s compare the new Messenger Pay of Facebook with those of the giants already in the field – mobile payment option by Apple (AAPL, Financial) with its Apple Pay system, Google (GOOG, Financial) with its Google Wallet and Samsung (SSNLF, Financial) with its Samsung Pay. These systems are all exclusively made for purchases at stores to buy products and not for transfer of money between people thus offering exclusive touch to Facebook’s new payment system for online transactions. "The focus is not about building a payments business that is accepted everywhere," Facebook product manager Steve Davis stated. "It's really about making Messenger more useful."
What about the future prospects?
In the process of using Facebook’s new payments tool, you will have to provide your debit card information that the company can access. It will then have a thorough knowledge of your financials and will track your transactions. Facebook has already been testing a “buy” button for users to instantly purchase things on their newsfeed, as advertised by companies. By liking and sharing such advertisements, you are leaving a trail of your favorites. This leads to Facebook throwing more similar advertisements on your Newsfeed, and if the buy option becomes available, your purchase will be just a click away. This will propel Facebook’s entry into the e-commerce world, like that of Amazon (AMZN, Financial), with a dedicated viewership and consumer base.
Facebook has so far declined having any intentions to move beyond U.S., but that may just be an eye wash. And instead of 1.3 billion users liking posts and uploading photos and spending time, they may also end up spending their money through the payment gateway.
Final word
Time will only foretell the actual future of Facebook’s new payment tool and to what extent it gains popularity in the ecommerce space and how it aids in handling personal transactions of users without allowing any data breach. Facebook seems to be on the right track to date, and its newer concepts will aid in building a solid brand image in the near future.
