Facebook announced that it has joined the Peer-to-Peer (P2P) money transfer market earlier this week and will soon allow users to send money to their friends using their Facebook Messenger app.
The new payment service is Facebook’s first venture into P2P money transfer and will be competing with payments providers such as PayPal, Square and large banks since it announced that users will have the ability to upload a MasterCard or Visa debit card to their Messenger app to send payments to friends for free.
“Today we’re adding a new feature in Messenger that gives people a more convenient and secure way to send or receive money between friends. This feature will be rolling out over the coming months in the US,” said Facebook in a blog post.
Users of Facebook will be able to send money from Apple and Android devices, as well as desktop computers in the next few months. The Silicon Valley company also highlighted the payment service is extremely secure and uses security features such as a PIN and touch ID on iOS devices.
“We use layers of software and hardware protection that meet the highest industry standards. These payment systems are kept in a secured environment that is separate from other parts of the Facebook network and that receives additional monitoring and control. A team of anti-fraud specialists monitor for suspicious purchase activity to help keep accounts safe,” said Facebook.
According to the FT, the new payment service has been introduced since Facebook hired David Marcus, president of eBay’s PayPal unit, last year to run their Facebook Messenger division. Facebook have been searching for ways to generate more revenue from the app, which analysts worried would be too intrusive if they gained revenue from advertising on Messenger like they do on the Facebook site.
Facebook’s Messenger payment service is similar to PayPal’s Venmo app, which although popular, was accused of making it easy for fraudsters to steal from users’ bank accounts. Since Facebook bought WhatsApp for $22bn last year, it means that any solution found for Facebook Messenger could also be applied to WhatsApp.