Facebook is planning to move into payments in India, the world’s second largest market in terms of internet users. The social media giant is reportedly building a payments platform that will be independent of WhatsApp payments, the UPI-based payments system developed by the Facebook-owned social messaging company.
According to FactorDaily, Facebook has already launched a beta version of its payments network in the form of recharge payments for mobile phone and other prepaid services. The payments system is being beta tested through Messenger, the messaging platform associated with Facebook. “The platform will be separate from WhatsApp and will allow peer-to-peer and peer-to-merchant payments,” a source familiar with the development told FactorDaily.
Payments and digital transactions is widely seen as the next big growth market by Silicon Valley tech companies. Google has already thrown its hat in the space with its own app called Tez. WhatsApp is trying to grab some of the market in that space with its own in-app payment system. Facebook, the big daddy of social media, just wants to cash in as well.
Facebook already supports payments option in the US where users can send money to friends on Messenger using a debit card or a PayPal account. The support for payments comes at an interesting time when its CEO Mark Zuckerberg questioned on its business practice by Senate and House Committee last week.
During the House Committee hearing, Representative Walden asked, “You can send money to friends on Facebook Messenger using a debit card or a PayPal account to, quote, ‘split meals, pay rent and more,’ close quote. People can also send money via Venmo or their bank app. Is Facebook a financial institution?”
Zuckerberg replied: “Mr. Chairman, I do not consider ourselves to be a financial institution, although you’re right that we do provide tools for people to send money.”
In India, the social media giant is exploring an opportunity to enable commercial transactions using Marketplace on Facebook Messenger. With Marketplace, it will be possible to buy and sell products within Facebook communities. Major brands can target, connect and transact with users directly through the platform.
The model is similar to WhatsApp for Business, where businesses connect with their users through WhatsApp. With Marketplace, businesses with connect with potential customers through Messenger but the real value will be unlocked when they complete some kind of transaction.
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The payments ecosystem is very ripe in India. There are already big name wallet brands like Paytm and Freecharge and banks have their own apps for digital transactions. In addition to these, there a plethora of UPI-based apps including government-endorsed BHIM app. The launch of Unified Payments Interface (UPI) has opened the world of payments to big tech companies and Facebook with its huge user base of nearly 200 million, the potential is endless.
The big question will be how much user data Facebook shares with brands while initiating connection and is their any privacy risk involved. After the revelations in the past few weeks, Facebook’s trust factor has seen a dent but it has still not reached a stage where everyone is quitting the platform.