Facebook just unveiled a new service that lets you send money via its instant messaging app, Facebook Messenger. It’s kinda like existing services from SnapChat, Square, and Venmo, letting you readily swap money other with people (as opposed to businesses) both near and far. But there’s a big difference: It runs on Facebook.
That means this new service instantly reaches the vast number of people who are already on Facebook. Suddenly, it’s far easier for a large swath of the population to send and receive cash. But friend-to-friend payments can also feed the much larger ambitions of Mark Zuckerberg and company.
Once Facebook has your credit card, it can build out services—revenue-generating services—that tempt you to spend.
Facebook’s new payments tool, you see, encourages all those millions of Facebookers to store their debit card info on the company’s machines. And this will likely fuel Facebook’s efforts to transform itself into a kind of e-commerce engine that competes directly with the likes of Amazon. Facebook is already testing a “buy” button on its social network that lets you instantly purchase stuff that shows up in your newsfeed. But that button becomes a lot more powerful if you’ve already entered your card into Facebook.
Facebook is moving in the same direction as Apple and Google. It wants to be the place where you spend not only your time but your money.
Facebook Payments No Surprise
The new Facebook service is no surprise. Last summer, David Marcus, the CEO of payments giant PayPal, joined Facebook to oversee Messenger. And later, on a Facebook earnings call, CEO and founder Mark Zuckerberg indicated that Messenger would dovetail with some sort of peer-to-peer payments service.
In the meantime, Snapchat added a payments tool to its popular messaging app, piggybacking on an existing tool from San Francisco startup Square. But Snapchat isn’t nearly as popular as Facebook. And its collection of other services isn’t nearly as large.
The Facebook social network is used by over 1.3 billion people worldwide, and Messenger, which the company spun off from its social network, now serves around500 million, according to the company’s latest public numbers. That’s probably about two and half times the number on SnapChat.
This means more people are more likely to use Facebook’s payments service than those others. But more important for Facebook, especially since it says it’s not going to charge for sending and receiving money, is your data—in this case, debit card numbers. To send money, you have to store your Visa or Mastercard details with Facebook. To receive money, the company explained, you have to do the same. And once Facebook has that data, it can build out services—revenue-generating services—that tempt you to spend.
Facebook Becomes Your Store
Facebook declined to be interviewed for this story. But the company tells us that if you enter your debit card details for use with Messenger, you can also use them with games on Facebook proper. And with those cards in hand, Facebook has a more direct path towards the world of Amazonian e-commerce. Last summer, around the same time it hired PayPal’s Marcus, Facebook started testing a “buy” button in users’ News Feeds, letting them instantly purchase goods and services without leaving Facebook. This too requires a card on file with the company.
For the consumer, all this is yet another push towards a world where you can more easily spend your money. It’s like Google Wallet or Apple Pay—except it only works online, not in stores. If you send payments via your debit card on Messenger, you can authenticate the transaction simply by pressing the fingerprint reader on your Apple iPhone. And odds are, things will work much the same way with the Facebook buy button.
For Facebook, all this is, well, the next big financial step. The site will give companies a means of not only advertising goods and services, but actually selling them. And ultimately, that will drive the advertising revenues of the future. Google is moving down a similar path.
But as is so often the case with Google, Facebook, and Apple, a question lingers: Do you want these companies handling so much of your existence? Facebook already knows what you like and who your friends are. Are you ready for it to also know what you buy?
Correction and update: This story original said that Facebook users could use credit cards to sent payments via Facebook Messenger. Users can only use debit cards. The story has also been updated with a comment from Facebook, saying that debit cards inputed for use with Messenger can also be used with Facebook games.