Controversial

Facebook And Messenger’s Mainstream March

Most people during their elementary school education learn that March is named for the Roman god of war: Mars. Far fewer people know why March was named this way.

As it turns out, Romans had world-conquering season in much the way modern man has baseball or football seasons – and world conquering season kicked off in March when they planted crops, paid tribute to Mars, and then marched off in legions to conquer their neighbors. Several months later the legions marched home, threw down their arms, harvested their crops and waited out the winter until the weather got better. The following year they would start marching to the last place they conquered and start all over again. It may not be the most efficient way to conquer the world – it took several thousand years – but insofar as the third month of the modern year is still named for a Roman god – you can’t really argue that it wasn’t effective on some level.

Mark Zuckerberg it seems is taking a page from the oldest of the school playbooks as March is shaping up to be the month for Facebook’s frontal assault. That battle for dominant players status kicked off last week, when the social media giant announced that it was adding P2P payments for free to its Messenger app.

To use the iOS/Android compatible system, users need to enter a Visa or MasterCard debit card issued by a U.S. bank to their Messenger account and create a PIN (or enable Touch ID on Apple devices). From there, users can send money through Messenger using the $ icon. Receiving money requires no input from the customer if they already have a debit card on file – P2P payments will simply find their way directly to the bank account associated with the debit card.

But that was just the start of their, ahem, March.

Yesterday, Facebook followed that up with a potentially even bigger announcement at their annual F8 developers’ conference – the launch of Businesses on Messenger, a new platform enhancement that will allow consumers and merchants to both interact and transact.

So how does it work?

Businesses on Messenger functions similarly to “regular” Messenger – only instead of communicating with friends about how long (or boring) one’s conference call is, or where they are going for dinner later – customers will, instead, be able to inquire about inventory or when their orders will ship.

And, yes, you guessed it, Businesses on Messenger will also complete purchases within the app if the company in question already has consumer card details on file.

“I don’t know anyone who likes calling businesses,” Zuckerberg said during yesterday’s announcement. He further noted that with Businesses on Messenger, merchants could start customer conversations at the right time and “communicate more naturally.”

And more privately than they would be able to if Facebook’s payments ambitions had been more squarely placed in its home business – the Internet’s public square.

With an army of hundreds of millions of users worldwide, Facebook has long been considered a lurking eCommerce player, though one MPD CEO Karen Webster noted in her commentary at the beginning of the week, it has had trouble in the past converting its apparently very commerce friendly “wallet garden” into an eCommerce success story in the past. As it turns out, people like to post their travel destinations, food preferences and pictures of their kids/pets on Facebook – but they aren’t quite as keen on all of their purchases being available for public view.

“People are funny about how much info about their spending habits they want to share with their network,” Webster wrote. “Maybe they’d like to keep their husband from knowing that they just bought another pair of Jimmy Choos. Then again, maybe they don’t want their friends to know they did either since they’d prefer not to see them wearing the same pair at the next cocktail party they attend together. Or maybe they just don’t think that it’s any of anyone’s business what they buy, how often and how much they spend when they do go shopping. And, since most people don’t really understand how to manage their privacy settings to limit who sees what updates, there’s always this nagging fear that any action taken on Facebook, including buying stuff, would be open to the whole world to see and, therefore, to know.”

And that is now a nagging fear that can be put to rest as Facebook has housed its commerce function in Messenger, an app that has 700 million consumers who message each other millions of times per day – in private and one-to-one.

“When Facebook spun off Messenger, it also cut the cord from its social network mother ship – and jettisoned any potential baggage associated with doing activities more appropriate in a one-to-one environment – like paying people and businesses and merchants – from those designed for a much more social and one-to-many setting – like posting pictures of the kids, dogs and grandkids,” Webster noted.

Last week, Facebook added a way to pay people to its messaging app – this week the other shoe dropped and they expanded that service to businesses. It seems now more than ever is a good time to look even harder at the questions Karen Webster posed at the beginning of the week: Is Facebook now payments’ biggest threat?

Possibly – P2P innovator Tom Lazay told PYMNTS in an interview shortly after the Facebook news was announced. Lazay is the CEO and co-founder of Silouet – a Cambridge-based mobile payments startup that seeks to make P2P payments possible between any two mobile phones, without an exchange of information (or download of a specific app).

“Like any entrepreneur entering a space that has big players in it, you see tremendous opportunity,” Lazay said. “And then you also realize that you might get trampled by the gorilla.”

And while being trampled is certainly no entrepreneur’s stated goal – Lazay thinks his company comes to market with a technology product and outlook that is unique and would be hard for a “big player” to emulate. And the opportunity that a high profile firm like Facebook brings to a still-emerging area like P2P payments can’t be overlooked, he said.

“They’re introducing millions and millions of people to this capability that I know from our research they weren’t aware that this capability existed,” Lazay said. “Many, many people, especially in the Facebook demographic, probably have used and heard of PayPal and that’s it. Companies and brands like Venmo and Square Cash are just not common household names when you get out of Silicon Valley or Boston. And so to integrate that capability on a product like Facebook Messenger that has such great exposure will expose people to some use cases that they will find very convenient.”

And introducing users to P2P payments via chat is an idea with a track record of success – China’s WeChat began as a simple chat platform that today has ~470 million are active users. Those users leverage WeChat’s payment capabilities to send each other money, buy tickets, pay bills, hail and pay for taxis and order and purchase things through the eCommerce platform.

Webster said on Monday “not to be surprised if at Facebook’s F8 developer conference this week, you hear Marcus invite developers to write commerce apps for Messenger that can leverage the registered payments card accounts that it hopes to create – or even act as an incentive for consumers to register them in the first place.” She pointed out that it’s “a short hop from sending money to friends to enabling the purchase of things that people do socially with their friends – tickets to movies or concerts, taking trips, pitching in for group gifts, going out to eat and splitting the check, etc.,” and to do it in a private, one-on-one environment with a merchant.

So, we weren’t – and if you read her column, maybe you weren’t either.

David Marcus, the ex PayPal President who today is at the helm of Messenger, said that he has taken his inspiration for Messenger from China’s WePay. At least on Day Zero of the new Messenger app, Facebook is far from being WeChat – and still faces several hurdles, not the least of which is overcoming some very fierce competitors who have a lot of experience with payments – not to mention Marcus’ alma mater, PayPal. It also has to create a customer habit – transacting inside of a messaging app, where none currently exists – and as Google can attest, just having a giant user base doesn’t matter if a company can’t motivate them to do something new.

But then not so long ago, Facebook convinced us all to do something fairly new – keep everyone we’ve ever met updated on all the most trivial details on our lives. And when they entered that field they weren’t the only player – they were just the player that emerged from battle victorious.

Perhaps they have an in with Mars that the rest of us don’t know about.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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