Amid the stream of news — tidal wave, even — about Facebook’s new Send Money feature yesterday, there was little mention of what’s likely to come next. And that is, paying for products via Facebook.
Facebook bought — and immediately shut down — shopping site TheFind just last week. What gives?
After yesterday’s announcement, industry watchers wondered how Facebook could boost its (relatively) paltry payments earnings with this free P2P service. (Free P2P is the new free checking at banks — Payveris has launched a movement urging FIs to offer P2P, which many see as a revenue source, for free.) Online commerce, buying things in one’s Facebook feed, seems perfectly logical, and Facebook wouldn’t need to ask users for money — the merchants would pony up the dough.
But spending money on Facebook, outside of gaming, is a new behavior for its users. Facebook has struggled with user trust for some time, which is slightly ironic since people pour their personal information into it daily, and hasn’t yet offered a compelling reason for users to load their cards onto the social network. Facebook is not a “transactional environment,” as iTunes is, with its 800 million-plus cards on file.
Facebook Messenger has about 80 million cards on file, according to payments guru Brian Roemmele, who also notes the service has the potential to open to credit cards and international remittances at any time.
Square tried to boost its cards on file with Square Cash. There is little word on the results of that effort, but Square has recently stepped away from consumers to focus on the merchant side. It announced its Order app would go the way of its Wallet app and close on March 20.
Another concern for Facebook’s Send Money entering the merchant space is that P2P doesn’t seem to mix well with commerce, outside of PayPal, which essentially invented the concept of sending people money online. Venmo, for example, is beloved by millennials, but it has not made major headway with brands and their commerce (though Venmo Touch is still out there, somewhere.)
Social media also has seen mixed results. Payments are inherently social, as James Wester, global payments analyst with IDC, noted yesterday. But SnapCash, the Square-powered payment service from SnapChat, is reportedly seeing little adoption and poor user experience.
Perhaps Send Money will ultimately be used to enable more in-ad purchases? Advertising is, after all, Facebook’s cash cow. But the move with TheFind, and the fact that Facebook is ‘always on,’ means that Facebook may be able to make the place you spend all your time, the place where you spend at least some of your money, too.