Social Commerce

Facebook Expands Payments Options And Its Obsession With Snapchat

Facebook Messenger Accepts Payments

Facebook has been changing its approach to payments. It is leveraging its social media position to attract some of the P2P and mobile market. The company is showing Snapchat it means business with a new app for the under-21s, and Mark Zuckerberg says the future will be built in Africa.

Facebook is trying hard to stamp its ground in the mobile space. In March 2015, Facebook Messenger began accepting payments. This marked the first P2P payments system within a communication platform. Facebook hired Paypal’s David Marcus to lead the charge, and Forbes predicted that Facebook’s revenues from payments would soar.

In 2010, Facebook offered Facebook Credits, with which users could buy virtual goods in games, and created a subsidiary to manage the payments. Then, in 2012, Facebook announced that it would stop its Credits and allow the use of third-party services.

Facebook has changed its original strategy of taking a percentage of fees charged to companies for hosting games on the platform to one that now uses chatbots and artificial intelligence in the instant messaging service. Challenging competitors, such as Venmo and Square, a model called contextual commerce allows payment transactions to occur while users are engaged in online conversations or content, similar to the model used by Tencent Holdings and the WeChat messaging app.

The site now processes payments from companies buying ads and through P2P money transfers. But for a Messenger chatbot payment transaction, payments are processed by third parties, such as Stripe, Braintree, Visa, Mastercard, American Express and PayPal. Last month, Azimo announced its integration with Facebook Messenger.

Mark Zuckerberg was optimistic before the launch of P2P payments on Messenger, telling analysts that Messenger would be lucrative in the future. “I’m a big fundamental believer that these are going to be very big contributors to our businesses over time, but we just have to do it right,” he said.

So, has Facebook done it right?

Unfortunately, the company has not yet lived up to the predictions of Forbes. Facebook’s revenue from “payments and other fees” declined from 16 percent of total revenue in 2013 to 4.7 percent in 2015, according to Bloomberg. In the first quarter of 2016, revenue for payments was the lowest in any quarter since 2012 and down 20 percent year over year. Chief Financial Officer David Wehner said that revenues were predicted to drop even more for the remainder of 2016 compared to 2015.

Let’s take a look at some of Facebook’s recent activities.


Facebook’s Buy Button

A new buy button that allows users to pay for products within the Messenger app was announced on Sept. 15 with the launch of Messenger Platform v1.2. This came five months after the Messenger app was opened to retailers and brands that want to build eCommerce chatbots.

The app automatically plugs in credit or debit card information from the user’s Messenger profile. Companies must use either Stripe or PayPal to process payments. When a user clicks on an ad and clicks a “Shop Now” button or “Learn More,” the merchant can drive a consumer to open Messenger and to go to either a copy of the ad or a message from the retailer.

Advertisers can select which audiences they want to target and when. Facebook’s goal is to keep the transaction within the Facebook ecosystem. Facebook said that 34,000 developers have joined the Messenger platform and have built 30,000 bots, a huge increase given that only 11,000 bots were noted on Messenger in July.

Facebook Snapping At Snapchat

Facebook is showing its paranoia when it comes to Snapchat’s popularity with the younger generation by launching a new app aimed at under-21s. Earlier, Facebook’s Instagram had launched a copycat Stories feature after apps such as Poke and Slingshot failed to make a dent in Snapchat’s user base. As Facebook’s ad revenue comes increasingly from mobile, the company is competing for consumer attention.

The new app, Lifestage, is a trendy iOS app that only the 21-and-younger age group can use and that Facebook hopes will snag some of Snapchat’s users. Users answer biographical questions about themselves by recording short video clips that others can view.

The app harps back to Facebook when it first launched among college students who needed a .edu email address. This time, growth is expected in high schools rather than colleges. Users can select their school, but at least 20 people from that same school need to be active for any of them to be able to see others’ profiles. Anyone 22 or older will not be able to communicate with other users, but it is unclear how Facebook will stop older users from joining in. Facebook does claim to have blocking and reporting features to stop any unwanted activity. Even so, it does seem to be rather a lure for predators and an accident waiting to happen.


Facebook’s WhatsApp Integrates Siri

Facebook integrated Siri into its WhatsApp Messenger with the latest WhatsApp v2.16.10 release for iPhone and iPad. The new functionality will be available for iOS 10 iPhone and iPad devices as the Siri SDK was opened to third-party developers and apps as part of the OS.

Users can send text messages and place calls through WhatsApp by asking Siri with no need to open the app. Siri will recognize a contact name and compose and send messages.


Zuckerberg Exudes In Africa

Mark Zuckerberg recently visited Africa and met with entrepreneurs from iHub, an organization supporting innovators. At iHub, he met with two entrepreneurs who had designed a mobile payments system for people to buy small amounts of environmentally friendly cooking gas.

While in Nigeria, Zuckerberg commented: “I think when you’re trying to build something, what matters the most is who wants it the most. This is where the future is going to be built,” referring to the African continent. Zuckerberg went on to visit Kenya, the world leader in mobile money. Kenya has 5.3 million Facebook users, many of whom use mobile to access the social network.


Facebook Pleases Everyone

Facebook is trying to please everyone — its advertising clients, as well as its users.

New features for Offers ad units and Page posts launched on Aug. 30. The new features give advertisers a better way to reach mobile consumers with online and in-store offers that will appear in the News Feed section. Offers are sent only to the consumers most likely to purchase their products, and the number of Offers claimed is recorded. Advertisers can better target consumers, and consumers should receive relevant and useful discounts.

An “A” for effort on the mobile front?



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