Facebook, Inc.FB has finally introduced a person to person payment feature on its messenger service nationwide. Users can easily send money to anyone on their friends list without accessing third party fund transfer services. All they need to do is link their Visa or Mastercard debit card to their Facebook account. The service is active on Apple's AAPL iOS and Google's GOOGL Android based devices as well as desktops and is currently available across the U.S.
This move marks Facebook's entry into a burgeoning online payment business. Not only will it make the social networking giant less dependent on services like PayPal or Venmo but will also place it in direct competition with veteran players like PayPal and other leading credit card companies and technology companies like Apple, Google and Twitter TWTR .
Reportedly, Facebook started to deploy its payment services gradually on a city-by-city basis in March this year beginning with New York City. Last month, Facebook Messenger added the ability to pay within group chats and allowed non-Facebook users to join its chat service last week.
We believe that with constantly evolving payment methods and consumers' demand for speedy and easy transactions, Facebook's new venture is likely to gain popularity, given its benefits over traditional payment methods, lower cost, faster responses and improved consumer interfaces.
In fact, its growing number of subscribers will ensure a steady customer base for the company's payment business. However, the company, like other social media websites is prone to hacks and data theft. Therefore, users might as well think more than once before linking their bank accounts to their respective Facebook accounts.
Nevertheless, Facebook believes that transactions via its messenger service are safe and secure as payment information is encrypted and separate from other parts of the network. In addition, the company reportedly also ensured that the whole process will receive an additional monitoring system in order to avoid security breaches.
We believe that Facebook's success in payment services can't easily be foretold. However, other services like WeChat are doing it easily enough. Since Facebook has significant global reach, which should help it expand its Messenger payment service worldwide to fully capitalize on this opportunity.
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