Facebook recently announced that its users can now send money to their Facebook friends completely free of charge through the newly enhanced Messenger app. That is, if they have already connected information from their MasterCard or Visa debit card accounts.
About 500 million people already use the Messenger app today. No surprise there considering that Facebook essentially compelled every one of its users to download the app when the social media company decided to separate it from the main Facebook app. Considering its wide use, perhaps it was a no-brainer for Facebook to incorporate a money-sending feature through its Messenger. And it is really easy to use. To be able to send cash to their Facebook friends, users just need to activate the feature by tapping a dollar sign while chatting on the Messenger app.
Interestingly, Facebook is not the only one allowing users to send money through messaging apps. As a matter of fact, in November of last year, Square collaborated with Snapchat in letting users transmit cash through the Snapchat messaging service. PayPal's Venmo and Square Cash also do it by linking to a user's debit card. If anything else, Facebook's move only heats up the competition more.
But Facebook may have the upper hand soon, considering its massive popularity, especially among mobile users. By the end of 2014, there were almost 1.2 billion monthly users logging in to Facebook using their mobile devices. Add the fact that Facebook also acquired Whatsapp (for an amount of $19 billion) last year, the social media giant adds another 700 million to its number of users.
But as mentioned earlier, Facebook faces tough competition. The one most likely to give Facebook a run for its money is Snapchat, which began as a startup but has since grown to become a giant in its own right. Much of Snapchat's success can be attributed to its knack for attracting the younger demographic, which just so happens to be one of the fastest growing. Snapchat is massively popular among users aged 15 years old to 30 years old. Surveys show that this age group is the biggest segment without any back account. But that could change dramatically, now that we have payment services in messaging platforms.
Contactless modes of payments in general are really growing in popularity and in use these past few months. Of course, Apple's introduction of its Apple Pay mobile payment system last year has plenty to do with it. And it appears that more and more users are now becoming aware of the existence of mobile payments systems, as offered not only by Apple, but also by Samsung, Google, and PayPal.
It was really only a matter of time before payment services worms its way into social media platforms. And now that Facebook, the biggest social media platform of them all, is in on it too, it is a good bet that sending cash through messaging services could become as commonplace as wiring cash via traditional means.
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