Author(s): Peter Bryer
Last week, Facebook introduced a payment service within its Messenger app that enables users to send cash to their Facebook contacts. The service is being launched in the US and requires users to connect a debit card or bank details to their Facebook account. Payments can be sent through mobile and desktop clients.
There aren't any charges for transmitting or receiving payments, but the availability of the service is expected to encourage more Facebook users to attach bank details to their accounts. This in turn will support more e-commerce transactions within the site's domains. Facebook's new Businesses on Messenger programme will allow third-party businesses to interact directly with potential customers via Facebook Messenger; enabling payments in the same environment could eventually enable a robust marketplace within the messaging service. In theory, Messenger could become one of the world's largest shopping centres.
The ability to wire money via messaging services isn't new. Last year, Snapchat launched its Snapcash payment service together with partner Square, which manages the back end and maintains users' banking information. Services such as PayPal, Swish and Venmo provide a similar money transfer service, but are less focused on chat.
Google's US Wallet users also have the ability to send money within a message, attaching cash as if it were a document. The money goes in and out of the user's Wallet Balance, which is attached to a personal financial account.
Google, like Facebook, now appears to be moving into a central monetary role with the expected introduction of a service called Pony Express. The service would allow Gmail account holders to receive bills to their inboxes and pay them directly within the mail application. This would provide account holders with the convenience of making payments in one place, and allowing them to use their inboxes as virtual filing cabinets.
Internet services and hardware providers are elbowing their way forward in the payments space with varied business models. Apple, Facebook, Google, PayPal and Samsung are each employing different strategies to generate revenue from their users. These aren't necessarily mutually exclusive and could co-exist, but they really can't cooperate.
The use of proprietary technologies and closed environments will make control points particularly valuable. Interoperability isn't part of the equation, meaning walls of separation will keep funds within domains. Facebook Messenger users, for example, will not be able to send money directly to Google Wallet users.
Users' bank accounts will be the ultimate common denominator, but CCS Insight questions whether users are prepared to trust untested services with valuable financial information, and some wonder whether Facebook and Google are launching big solutions to small problems. Bank transfers are already a straightforward, free and secure process in many countries. For most users, there's no hurry to catch the Pony Express.