Facebook has introduced a person-to-person (P2P) mobile money transfer feature to its Messenger service . Facebook Messenger is a popular application, and the convenience and simplicity of mobile money transfers offers a tangible benefit to consumers. Although the new feature is initially confined to the US, Facebook Messenger has a large and growing international base. According to Ovum in November 2014, 500 million people were using Facebook Messenger, and the app is expected to reach more than 890 million users by the end of 2015. If the m-payments feature proves popular it will increase consumers’ use of and loyalty to Facebook Messenger, which is important, given the intense competition in the social messaging space. If this approach is successful, Facebook may add m-payment functions to WhatsApp.

Facebook is not the only player to have introduced m-payments into messaging applications. In fact, a host of its rivals, including PayPal-owned Venmo, Snapchat, Line, WeChat, and KakaoTalk have already done so. Moreover, several of these players have added m-payment services beyond P2P transfers and will no doubt look for further enhancements now that Facebook is on the scene. A further challenge for Facebook is trust; it has built the platform and cannot afford to have any teething problems when it comes to security and privacy.

The huge growth in Facebook’s advertising revenues, particularly those from mobile, means that it is under no immediate pressure to monetize payments directly. However, there is no doubt that it wants to do so in the longer term. It has been experimenting with payments for a number of years, gradually building its capabilities in this area, albeit with mixed results. For every robust initiative such as the “buy” button in ads it has made false steps such as Facebook Gifts and the now-defunct Facebook Credits virtual currency.