Facebook is diving into mobile payments with it’s own twist. Rather than slug it out with Apple and Samsung and a slew of others going after the merchant point-of-sale, Facebook is sticking to its roots by enabling their users to send peer-to-peer payments to friends and family.
Roll-out of the payment feature launched on Tuesday to US-based users and is available through the mobile messenger app and through traditional desktop chat.
“The focus is not about building a payments business that is accepted everywhere,” Facebook product manager Steve Davis says. “It’s really about making Messenger more useful.”
Facebook does have heavy competition in this space with established services like Western Union and Paypal and newly released services from SnapChat, Google, Venmo and Square Cash.
The feature does have some limitations, for example:
- Limited only to VISA & MasterCard debit cards issued in the US. Using a credit card or bank account isn’t available as of yet, but I’d imagine that they would roll those options out at a later date if they find some early traction with users.
- You can only send funds to friends who have already setup the feature by adding a debit card on file and setting up a four-digit pin.
- Funds are transferred instantly but can take up to three business days to be made available to the recipient.
Given Facebook’s size of 500 million + users, the payment feature has the potential to make an instant impact in the market, while leading to even greater opportunities for the company down the road. Venmo is asking users to sign up with Facebook, so why even bother when you can eliminate a step or two by using the Messenger app.
“Facebook could use this as a back door to get people’s debit cards to enable the buy button,” said Robert Peck, an Internet analyst with SunTrust Robinson Humphrey.