Two years ago Facebook Inc (NASDAQ:FB) launched a feature similar to Paypal which allowed Messenger subscribers to send money to friends.
The newest innovation
On Tuesday, Facebook further expanded that feature to allow users to transfer money to groups of people hence split the cost of services including concert tickets, bar bills as well as gifts. The platform is designed to give users another way to make use of the messaging app provided by Facebook which hasn’t really made any effort to earn from the payments. It is meant to keep the users from leaving Facebook for other services to pay babysitters, shop or book hotels.
The origin of the idea
The giant social networking introduction of payments as one of its services, borrowed the idea from a popular Asian messaging apps such as WeChat which is a Tencent owned company. The app allows Chinese customers to purchase items, order rides as well as transfer money to other users within the App. The apps have made huge income from combining commerce and payment with chatting.
How it works?
Users simply click on the payments icon while on their groups chats in order to request for payments from other users. From there they are able to choose which individuals to request from or send money to as well as specify the amount.
Users are then notified within the app whenever someone sends them money or when they successfully send money to another user. Initially, it was a requirement for users to load a debit or credit card number in the app in order to enact payments.
Facebook said, “To do so, enter the amount you want to request per person or the total sum to be divided evenly through the group, either including yourself in that calculation or not.”
Competitors
Group payment is a common feature of the Venmo a service owned by Paypal. Venmo is very popular among the millenials and it allows individuals to send money among themselves through a mobile app. If group payments by Messenger receive a warm welcome from its 1 billion active uses, it could easily overtake Venmo.
Facebook does not charge any fees to the users for group payments. Facebook stock closed at $139.92 on Tuesday after declining by $1.12 or 0.79%.
