Facebook just keeps hitting us with some big news all the time. If they are not giving so many settings on your privacy that confuse you so much that you forget privacy, they are probably monitoring and committing to memory your unpublished status updates.
This time, the social network has decided its time they help you send money to people within same Facebook.
When you chat with friends about settling debts or splitting the bill, Facebook doesn’t want you to have to open another app like PayPal or Venmo to send them money. So yesterday it unveiled a new payments feature for Facebook Messenger that lets you connect your Visa or Mastercard debit card and tap a “$” button to send friends money on iOS,Android, and desktop with zero fees. Facebook Messenger payments will roll out first in the U.S. over the coming months.
Rather than lean on a payments company like PayPal to power the feature, Facebook built it from the ground up from its experience processing over 1 million payments a day through its ads and games platforms.
Transactions and payment info are encrypted, and Facebook says “These payment systems are kept in a secured environment that is separate from other parts of the Facebooknetwork and that receive additional monitoring and control,” from an anti-fraud team.
By making payments part of its oft-used messaging service rather than a standalone app, Facebook is looking to edge out dedicated P2P payment competitors like Venmo/PayPal, Google Wallet, and Square Cash, which people open less frequently. That’s the same strategy as the Square Cash-powered Snapcash feature Snapchat launched in November.
One would think, what’s the point of using other payments company when I can do that via Facebook.
Here is How It Works…
Once users get the feature, they’ll see a “$” button in the Messenger message composer next to the options to send a photo or sticker. When they tap it, Facebook will ask them to enter their debit card info. Users won’t have to fiddle with finding and entering bank account and routing info, making it easier than some alternatives, but they can only use Visa and Mastercard debit cards. Facebook decided against allowing credit cards because they would entail fees and it didn’t want users to get charged if they didn’t understand.
For extra security, users are prompted to set an in-app payments passcode or Apple TouchID fingerprint to confirm transfers, though they can opt out of this extra authentication in the settings. If users already have a debit card on file with Facebook from gaming, ads or donations, they can use that, too.
Once the $ button is tapped, users enter the dollar amount and hit Pay. The money is instantly taken from their debit account and delivered to the recipient’s debit account. Facebook never holds the money, though the receiver’s bank will usually take a few days to make the funds available as is standard. Both users see a confirmation message detailing the transfer status and time.
In case anything looks fishy, Facebook will ask users some extra financial security questions before a transfer goes through. Afterwards, users can see all their previous payments and funds received in the Payments History section of Messenger’s settings.
Now that’s some innovation! If this payment system succeeds, Facebook will most likely extend it to other types of purchases, such as consumers’ purchase of products directly from advertisers.
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