Blog: Nothing More Social
By Carol Coye Benson, Glenbrook Partners
I read the Facebook announcement of payments through its Messenger app with interest, and with just a touch of “about time!”
After all, there’s nothing more social than sending money to family and friends. And although much attention is paid in the press to the friend-to-friend use cases, I suspect that the family-to-family opportunities are much greater. This is not just kids’ allowances, but the whole wide world of occasional and ongoing support payments among relatives. And, how nice that it could easily solve that vexing problem of thank-you notes after the birthday check arrives.
|“Looking ahead for Facebook, the particular opportunities with cross-border workers’ remittances are enormous … Who’s more interested in pictures of loved ones than the remote worker who is supporting her family? Who’s more interested in ‘status updates’?”|
Looking ahead for Facebook, the particular opportunities with cross-border workers’ remittances are enormous. This goes beyond what the company is currently offering, but it doesn’t take much imagination to figure out they’re heading there. After all, cross-border is lucrative: anyone looking at Visa, MasterCard or PayPal financial statements can spot this without difficulty.
The synergies are staggering. Who’s more interested in pictures of loved ones than the remote worker who is supporting her family? Who’s more interested in “status updates”?
Brand is another great advantage for Facebook. At Glenbrook, we spend a lot of time talking– and teaching–about the importance of brand (whether “big B” (e.g., Amex) or “small b” (e.g., “check”) as an enabler of payments. This is because the sending and receiving parties need a common word (brand) to tell each other how they’re going to pay. Lack of a common brand is a huge barrier to entry for payments startups. Facebook has this covered: “I’ll send it to you by Facebook” will be readily understood by their hundreds of millions of users.
Some will point out that receivers often don’t have bank accounts—very true. But the GSMA, the global association for the mobile telecom industry, points out that there are more than 255 live mobile money services targeted at the unbanked in the developing world. I’m sure Facebook is smart enough to figure out how to deposit money into mobile money accounts. There will be a lot of heavy lifting to do to monitor and control fraud—but as David Marcus learned in his years at PayPal, that’s entirely possible to do, with enough people, systems and money—which I’m guessing are available at Facebook!
The world of P2P payments has just changed in a very major way.
Carol Coye Benson is a founding partner of Glenbrook Partners, a payments consultancy based in Menlo Park, Calif. Carol’s practice focuses on mobile payments, consumer payment behavior, bill payment and B2B payments. She can be reached at firstname.lastname@example.org.
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