Uber Pact Makes Facebook the New Face of Streamlined Payments
Uber has long taught that the best way to get consumers to pay with a mobile device is to make the payment almost invisible. Now, with the help of Facebook and Braintree, Uber is applying that philosophy to the rest of its business — and if Facebook has its way, other companies will again follow Uber's example.
Through PayPal's Braintree, Uber is doing away with the need to open its app by letting U.S. riders order a car and pay their fare within Facebook's Messenger. The process is so streamlined that if one party to a Messenger conversation simply types an address, either user can click the address to request an Uber ride.
The entire process, including driver status updates and payment receipts, appear within Messenger the same as any other conversation with a Facebook user. Alternatively, Uber ride requests can be made from within a menu in the Messenger app.
"This model should be transferrable to a wide variety of relationships," said Rick Oglesby, a senior analyst at Double Diamond Payments Research. "Ultimately, there is a tremendous amount of un-monetized consumer attention being directed towards a wide variety of mobile apps, and the obvious monetization opportunity is to re-direct that attention to commercial transactions."
The collaboration seems to draw from Braintree's experience with its own Venmo app, a person-to-person payment system designed to resemble a social media app. Within Venmo, users can access a list of friends and send emoji-rich messages to accompany any payments. The Uber setup also builds on Facebook's own efforts to blend payments into the Messenger business, which is headed by former PayPal president David Marcus.
Marcus' comments suggest the Uber integration will be the first of many links Messenger will make to other companies' services. "As we shared earlier this year at F8 (our developer conference), we're building ways for you to interact with the businesses and services you care about right from Messenger," wrote Marcus in a statement that Facebook's public relations unit emailed to PaymentsSource. Uber, Facebook and Braintree did not provide executives to comment by deadline.
Braintree's tokenization technology secures and processes the payments made to Uber through Messenger. The Uber/Messenger service is in testing presently and will first be expanded to Uber's U.S. markets before coming to other countries. The service will come with an initial offer of a free ride of up to $20.
"As consumers spend more time engaging inside social and messaging apps, connecting merchants and consumers directly within those experiences is a massive opportunity, particularly on mobile devices. This is the essence of contextual commerce," said Juan Benitez, a general manager at Braintree, on the company's website. "This new functionality sits right at the intersection of increased mobile commerce adoption and the rapid growth of on-demand services, and ties the two together to streamline a truly mobile commerce experience."
Social networks such as Facebook, Twitter and Pinterest have experimented with in-app purchasing concepts over the past couple of years, often with the goal of letting people buy products advertised on social media without requiring users to open a new app or website.
"The easier it is to complete the commercial transaction, the better, so these collaborations are necessary," Oglesby said. "Braintree also has a pre-existing relationship with Uber and can likely leverage information about Uber customers to facilitate these transactions as well."
The new collaboration also advances what's called "contextual commerce," or the use of data from connected devices to power and inform transactions in the physical world in near real time.
"Instead of relying on its own app, Uber is integrating itself into other digital environments where the need for transportation might arise, such as social platforms," said Zil Bareisis, a senior analyst at Celent. "I have no doubt that we will see more similar partnerships in the near future as digital experiences get orchestrated across multiple companies."