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Facebook Messenger's new money-transfer idea faces a number of problems

It has a long way to go before it becomes the norm.

Image: David Jensen/EMPICS Entertainment

TO THE SURPRISE of nobody, Facebook finally unveiled its money transfer service for Messenger.

It works the same way it does on rival services like Snapchat. Start a message with a friend, tap the $ icon (it’s US-only), enter in the amount and tap pay. According to the company, it takes one to three business days for the money to transfer depending on the bank used.

It’s a simple concept, and Facebook is hoping that this will become the start of another lucrative service when it rolls out, but there are a few obstacles facing it.


Send Money to Friends in Messenger from Facebook on Vimeo.

Can people trust it?

Arguably the biggest obstacle it faces. Being one of the biggest services in the world means it regularly deals with data and privacy concerns. With those being cited again and again, what reason would people have to trust it with their financial details?

When you consider the overblown reaction to its app permissions last year, there is a real fear about what Facebook knows about you and the info it has access to. Yet even if a concern doesn’t have any foundation, that doesn’t mean people don’t have a right to be concerned.

Facebook’s history of introducing new features isn’t great

This is tied more into specific apps rather than features, but the only successful apps Facebook launched already existed on the desktop site.

Messenger, Groups, and Pages are successful because they were familiar concepts. Others like Slingshot, Camera, Poke and Home weren’t since they deviated too much from the traditional formula (It’s the reason why it purchased Instagram and WhatsApp).

Yet introducing an unfamiliar feature within a familiar concept is a new one for the company and could go either way. The closest comparison it has is Instagram introducing direct messaging in 2013 and when was the last time you heard about that? Facebook needs to make sure payments doesn’t fall into the same trap.

It’s entering a crowded field

Facebook isn’t alone in entering this field. Instead, you could probably argue that it’s somewhat late to the party considering the likes of Gmail, Snapchat, WeChat, Line, already offer the same or similar functionality. What makes its attempt different to other competitors?

Tying into the previous point about giving Facebook too much information, people may view these other services are more appealing since your information is split up between companies instead of one holding all the keys.

A service like Gmail (whose money transfer service is only available in the US and UK) makes more sense if you’re an Android user as you may have bought apps through Google Play. Facebook makes less sense unless you already pay for in-app content through its store.

FB Games While it tiny compared to its advertising earnings, Facebook still makes money from in-app payments. Source: Facebook

And here are the reasons why payments on Messenger could work.

Facebook’s reach on mobile is almost unmatched 

1.39 billion monthly active users is not a number you can ignore and when you consider that 1.18 billion are active on mobile, that’s a large audience.

Likewise, Messenger crossed the 500 million monthly active users back in November so assuming that roughly a quarter of them are based in the US, it’s a good test market to see how feasible the idea is.

Probably the closest rival that can match it is Google Wallet, and it only recently introduced the same feature to Gmail users in the UK. It’s been pretty slow in rolling out its service which could open up an opportunity for Facebook

FB monthly active users In short, Facebook has a lot of regular users. Source: Facebook

People are (slowly) warming to mobile payments 

Something Facebook has attempted before but failed at numerous times is eCommerce. Encouraging people to purchase items through a site they associate with friends and family is a tough sell (pun not intended) and the likes of Facebook Gifts fell through shortly after they were introduced.

Sending money to friends, while not an original idea, is probably the best way to warm people up to mobile payments.

You’re more likely to send money to a friend or family member (for example, to pay for a bill) than pay for an item online since you already have a bond and history with them. If Facebook is able to tap into that, and show it’s an easier way of completing the same action, it may have a chance.

Its security system is pretty solid

Granted, payments is a whole different ball game, but it’s already been handling them for years. It already deals with transactions through games and has enough experience to know what works and what doesn’t.

In the case of its payments security system, it says this:

We use secure systems that encrypt the connection between you and Facebook as well as your card information when you ask us to store it for you. We use layers of software and hardware protection that meet the highest industry standards. These payment systems are kept in a secured environment that is separate from other parts of the Facebook network and that receive additional monitoring and control. A team of anti-fraud specialists monitor for suspicious purchase activity to help keep accounts safe.

Also, the worst that’s happened to it in recent times is downtime for 40 minutes. That doesn’t mean it’s completely secure (again, nothing is), but at least it follows good practice.

Read: Google is now getting humans to review all Android apps >

Read: Nintendo is finally going to start making smartphone games >

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About the author:

Quinton O'Reilly

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