Australia has granted Facebook a patent that allows the Palo Alto, California-based social media behemoth to carry out peer-to-peer payments on its Messenger service. This is likely to generate antagonism from Australian banks which have put in over $1 billion in developing a peer-to-peer payments platform called New Payments Platform that is expected to be unveiled later in the year.
The development comes in the wake of another American technology giant, Apple, entering Australia’s payments scene with Apple Pay. It is, however, understood that Messenger payments will not be immediately available in Australia as Facebook is not yet ready to launch a product as there are several hurdles to overcome.
Around the globe
The payments patent that has been granted to Facebook, which was initially logged in the United States, was also filed in a couple of other markets around the world. According to Australian Patent Office documents processing of the payments patent took place in May. Facebook is also in plans to launch the peer-to-peer payments in the European continent. Last year the social media giant obtained a license from the central bank of Ireland.
Peer-to-peer payments on Facebook were launched in the United States two years ago following the social media giant’s hiring of a former PayPal president, David Marcus, as the messaging vice president. This service which is offered through the Messenger app gives users the ability to pay friends, groups or family upon linking it with a debit card that has been issued by a bank. The service is free for users. It is understood that the service uses payment rails offered by either Mastercard Send services of Visa Direct.
Source of data
With Facebook’s P2P payments being free, Facebook’s strategy seems not to make the service a revenue earner but rather as a way of ensuring that its users stick to the platform. Also, the P2P payments would offer Facebook another source of data which would then help in ad targeting.
“Payments may not be part of their core strategy to grow profits, however many social media channels are looking to enable payments to keep people on their pages longer,” said Lance Blockley, the managing director of The Initiatives Group, a payments consultancy.
Other social networks such as Pinterest and Instagram are also believed to be developing payment features as the world moves towards a situation where every day online services have payments embedded in them.