Technology with attitude

Facebook Messenger Could Lead the Way in Mobile Payments but after Accepting the Bitter Truth

0

Facebook recently rolled out a feature that lets Messenger users in the U.S. to send money to each other using this platform.

Users only need to link their Facebook Messenger account to their debit card, and that’s it.

This is an amazing P2P money transfer system that has been created and yet there is a big ‘but’ behind this mobile payment system. Can you imagine handing your debit card information over to Facebook?

Well, in the past Facebook has not been very successful with implementing payment services. One of the most notable failures is a Facebook-branded prepaid card that was courtesy of Discover and Facebook Gifts. So, why have all the many previous attempts by Facebook to introduce payment systems failed?

The bitter truth that Facebook Messenger needs to learn

If you look at it, all of these payment systems have been launched and tried in the United Stated of America alone. The same is happening with Facebook Messenger payment system and for sure, it’s doomed to fail.

One thing that makes it almost impossible for Messenger payment services not to succeed in the U.S. is the entrenched credit card networks, for instance, American Express, Visa and MasterCard. Also, the country is equipped with an established and robust banking system with credit card bureaus providing the trust index and furthermore, people believe in the power of the U.S. dollar.

These are extremely powerful players with very distinct interests and going up against them requires a lot. According to the latest financial reports, Visa, MasterCard and AmEx have a combined valuation of $370 billion while on the other hand; Facebook only manages a reasonable $260 billion. However, only a fraction of Facebook deals with payment services.

Facebook has plenty of alternative markets on the table, among them Asia, Latin America and Africa. As a point of presence, it is easier to partner with a local business or mobile operator with such a retail network. In a vast of these countries, many people do not trust their governments and the banking institutions as well, and there is a credibility gap.

On the contrary, Facebook is one company with so much credibility from all corners of the world and with the money it has spent on developing its services in the developing world, it is about to time the company brings these services to the developing world. The company has done well with designing versions that suit the needs of people in developing countries, among them leaner mobile versions that take into account the data usage aspect.

Messenger payment is one area where Facebook can thrive by coming to the aid of developing countries. In lots of these countries, you won’t find credit bureaus like Experian and Equifax. This is where Facebook can come in and bridge the commercial trust graph just like it does with the friend graph thanks to the already established trust it has in these regions. Facebook has more than 1.5 billion people and for sure, there are good chances that the person you want to send money to is on Facebook.

It is time Facebook faced the hard facts and accepted the bitter truth – that America has never been its best market for mobile payment services.