With Facebook Pay, social media giant rides on global database
After weeks of enduring a firestorm of negative feedback regarding its proposal to launch the Libra cryptocurrency network, Facebook is turning to a more conventional system by joining other "Pays" in launching Facebook Pay.
Facebook Pay consolidates a payment service across the main Facebook app, Facebook Messenger, Instagram and WhatsApp. The social network hopes to take advantage of the powerful global reach Facebook already enjoys.
"People already use payments across our apps to shop, donate to causes and send money to each other," Deborah Liu, vice president of marketplace and commerce, said in a Tuesday blog about the new system. "Facebook Pay will make these transactions easier while continuing to ensure your payment information is secure and protected."
Those on Facebook have been able to make purchases or send money through the social media channel's Messenger app in the past, but Facebook is touting the new Pay as a more convenient, secure and consistent channel.
It also establishes Facebook as another mobile wallet seeking to create its own payments ecosystem, or a "sub" ecosystem, said Steve Mott, principal of BetterBuyDesign, a Stamford, Conn.-based consulting firm.
"Facebook will be the first to do a sub ecosystem globally through Messenger, and then the other apps around the globe, and I think that is an important distinction," Mott said.
While Apple Pay has established its own financial ecosystem, and PayPal and Google are attempting to do so, most of the competitors in P2P and mobile money movement haven't established a global network.
"Facebook actually has a better chance of being a payments ecosystem because they are all over the world," Mott added. "They enhance these services for customers who need them and it doesn't take much for them to reach critical mass."
As such, Facebook appears to be "bolder and with a much broader vision" with Facebook Pay than in its previous dabbling with P2P payment options, Mott said.
Aside from an explanation of the new service, a page on the Facebook site devoted to a Q&A format regarding Facebook Pay posted questions, but showed the message "this feature isn't available right now" instead of answers when clicked upon.
Facebook Pay users will also be able to add preferred payment methods in the Facebook Pay wallet, including most major credit and debit cards and PayPal. Once the credentials of those payment vehicles are entered, the user would then use Facebook Pay for any of them without re-entering credentials.
Facebook plans to roll out Facebook Pay on Messenger and Facebook apps this week in the U.S. for fundraisers, in-game purchases, event tickets, P2P payments and some parts of Facebook Marketplace. It will eventually make Facebook Pay available on Instagram and WhatsApp in other countries.
The consolidation of payments falls in line with other Facebook efforts to integrate its messaging platform.
The company is saying the Facebook Pay service is separate from the Calibra wallet that it continues to work on as the app to operate on a Libra network.
Libra has been bogged down by federal scrutiny in the U.S. and the recent departure of traditional payment companies that had initially voiced support for the concept.