Facebook launches Messenger Payments in the UK
Collecting money from friends is always an impersonal and unpleasant experience, even for those without thumb-breaking debt collectors on speed dial. You nag your soon to be ex-friends for a while, and eventually, they collect your bank details, jump through various hoops with their bank and send the money. Then there are the few days of stress where you obsessively check your accounts waiting for confirmation.
PayPal tried to fix this problem in the late 90s, but it’s still not universally used, and a single email address typo could result in an errant payment. In 2015, Facebook introduced an alternative, allowing instant debit card to debit card payments over Messenger, and today the UK becomes the second country to receive support.
“It was the most requested feature of people from the UK” David Marcus, Facebook’s head of Messenger tells me after I witness a demo at the company’s London offices.
Actually, the demo was so brief that it actually took me longer to find the building and ride the lifts than to actually see it in action, but such is the company’s point: it’s ridiculously easy. Just talk to a chat to a friend as normal, press the blue plus icon and then tap payment. Enter the amount you want to send, enter your payment PIN to proceed and you’re rewarded with money icons raining down the screen to celebrate you becoming slightly poorer. No hassle: it’s just done. You can see when the payment is accepted, and it’ll go straight into your friend’s account. It’s returned to you in seven days if the other person doesn’t claim it – by not setting up their debit card, say.
Marcus believes that Messenger is the perfect platform for payments because it mimics the way in which we arrange our lives offline. “Generally you initiate payment always in the context of a conversation,” he explains. “If it’s in the physical world, I’ll have to ask you to pay me back for money you owe me – you don’t spontaneously walk up to me and give me money. The same is true in the digital world: it all starts with a conversation.”
It’s been a big success in America, so why has it taken so long to come to the UK? “ It’s extremely hard to do in a way that’s secure and fast,” Marcus explains. “It’s a lot of hard work behind the scenes to make it look seamless.
“It’s particularly hard to introduce it to new countries,” he continues. “Every country you have to go and build a consortium of banks and work through the networks like Visa, MasterCard, et cetera.” The UK, he says is “quite good as compared to other countries,” but everything is relative when you’re spinning so many plates. There is a list of countries on the Messenger Payments hit list, but no, they won’t tell me where’s next.
So how does Facebook make money off this? “We don’t,” replies Marcus. “It’s actually a cost centre more than anything else because those payments are free, and there’s a cost to us. But we feel like it’s an acceptable cost for us to bear because we provide a lot of value to people.”
That (presumably, in the greater scheme of things) small loss will continue into business payments when they’re added to Messenger – also free of charge. “It’ll be great for small and large businesses alike because they’ll be able to accept payments without needing you to type in your card number. We’ll already have it on file.”
If anything, UK adoption should be quicker than in the US, chiefly because of M suggestions. That’s the AI assistant within Facebook Messenger that provides selectable replies for conversations based on the context. In other words, if someone says “you owe me £20 for the dog’s audiobook subscription,” Facebook Messenger will contextually give you the option of paying right there and then – before you can even consider whether the dog is getting anything out of War and Peace.
This fixes a big problem Marcus and his team had when launching in America, which was customers actually knowing it was there. “The hardest thing is awareness, and we have a lot of capabilities inside of Messenger that people aren’t aware of.” In fact, there are already Messenger applications which offer functionality that Facebook itself doesn’t yet – like overseas money transfers. This is something that the company might offer eventually but is somewhere near the back of the queue when there are hundreds of other countries to welcome to the programme first. “It is a big opportunity, but not as big as domestic markets,” Marcus explains.
You can use Facebook Messenger payments right now in the UK – either on desktop or through the Messenger app for iOS or Android. The Messenger Lite app isn’t included though – and Marcus tells me that’s deliberate, as it would go against the ethos of the slimmed down version. “P2P features don’t fit the bill for that – we’re trying to keep it very small footprint.”
That means that those waiting on debt payments from me will have to wait a little longer until I can get to my laptop – but that’s probably still preferable to waiting for me to send a payment via BACS, authenticated through a card reader. If Facebook can crack the trust problem – and given it goes via your debit card, all your normal protections are in place – this could be a truly transformational change.