There is no better way to express appreciation for friendship than to shower that friend with dollar bills; or as the rapper Fat Joe would say, “make it rain.” Facebook is making that monetary aspect of friendship even easier with its new mobile payments feature within Facebook Messenger.
Today, Facebook announced a new feature that enables you to send your friends money as easily as sending a picture or message. All you have to do is tap the $ sign within the Facebook Messenger app, enter an amount, tap “Pay”, and enter the debit card that you want the money to be pulled from.
The service is free and is comparable to the likes of Venmo, SnapCash, and other mobile payment apps. What will set this mobile payment option apart from existing apps is convenience. Almost everyone (1.23+ billion people) is already acquainted with Facebook and connected to their friends. Most Facebook users already have the messenger app downloaded. Sending money to friends for Facebook users will be literally a tap away.
Comparatively, Venmo helped pioneer mobile payments. The service is an extremely simple solution that functions in a relatively similar way. You can even connect to Venmo using Facebook and find your friends using the social network to share funds.
Facebook is likely to follow the same business model as Venmo in offering up this free service to its users, while making money off of merchants that use the service to charge their customers. This could potentially transform the way businesses use social media to advertise and sell to their followers. No longer would a purchase require navigating to a business’s site and entering your credit card information into a portal that could be secure. Stored payment information in Facebook could mean a product could pop up in your newsfeed and the action of purchasing is as straightforward as liking the post; one tap/click/insta-buyer’s remorse.
The above potential reality is both exciting and terrifying. The thought of Facebook becoming an eCommerce platform has the potential to both alienate users and improve the buying experience. To limit user alienation, Facebook is likely to give its users control over what types of promotions land in their Newsfeed. However, considering that I still receive daily Farmville invitations despite the option to disable such request, mankind is inherently lazy and Facebook will profit off of that laziness.
If there is a company that should fear, however, it would be Venmo. While the company has been growing rapidly, it is still in the growth stages and its user-base isn’t anywhere near that of Facebook’s. Facebook hasover 1.23 billion active users (That’s over 1/7th of the world’s population!) Venmo has not shared their user numbers, however, considering that their iPhone app has only received 6 total ratings; it’s safe to say that their user-base isn’t anywhere near 1.23 billion.
With the convenience of mobile payments being a part of Facebook, it is going to be hard to talking your friend into downloading an entirely new app to send a payment when most individuals already have Facebook installed. Venmo does offer a feature that Facebook does not, and that is the ability to pay with a credit card. The sender is required to pay the processing fee on these types of money transfers however.
What do you think of Facebook’s new payment app? If you’re a Venmo user, will you switch? Do you think Venmo is in trouble? Let us know in the comments below.