Markets

Facebook Inc's New Service Could Disrupt PayPal and Square

Facebook just unveiled a payments system for Messenger that will let users pay each other via messages. The feature will launch for iOS, Android, and PCs over the next few months in the U.S. Payments will be secured by Touch ID on iOS devices and a PIN code for other platforms.

This move is a clear declaration of war against the peer-to-peer payments market, which includes eBay 's PayPal, Square, and Venmo. Like Square and Venmo, Facebook's peer-to-peer debit card payments will be free. All three services undercut PayPal, which still charges 2.9% plus $0.30 per debit transaction.

Google Wallet. Source: Google Play.

Lastly, adding payments to Messenger overseas could help it compete against popular Asian chat apps like Tencent 's WeChat, which can be used for mobile payments, e-commerce purchases, and mobile gaming. Messenger could also eventually help the 92 million expats on Facebook avoid high remittance fees for international transfers.

The bottom line

Facebook's move into mobile payments is a smart move that could turn the network's massive user base into a huge peer-to-peer payments network. If this initiative gains momentum and locks more Facebook users into Messenger, then PayPal, Square, and Venmo could be in serious trouble.

Wall Street hacks Apple's gadgets! (Investors, prepare to profit.)

Apple forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering Apple's brand-new gadgets. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, just click here !

The article Facebook Inc's New Service Could Disrupt PayPal and Square originally appeared on Fool.com.

Leo Sun owns shares of Facebook. The Motley Fool recommends eBay, Facebook, Google (A shares), Google (C shares), and Twitter. The Motley Fool owns shares of eBay, Facebook, Google (A shares), Google (C shares), and Twitter. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

Copyright © 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

TWTR FB GOOG GOOGL EBAY

Other Topics

Stocks

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More