Dive Brief:
- Facebook appears to be preparing a way for consumers to use its Messenger chat application to make purchases at brick-and-mortar stores, according to a report from tech news site The Information.
- Messenger would support payments without making users leave the app, decreasing friction and underlining the value of the in-app advertisements Facebook is set to debut in June.
- The chat app already helps consumers execute money transfers and request rides from Uber and Lyft, and facilitates customer service interactions for retailers such as Zulily.
Dive Insight:
An examination of the code for Facebook’s Messenger reveals that the chat application may soon offer its 800 million-plus users a new option to shop and pay for items at physical stores, The Information said. The app would clear transactions and allow in-store pickup with “no cash needed.”
Offering the option of paying ahead of time or at pickup via Messenger, the new functionality will likely allow shoppers to pay for goods without leaving the app or using a credit card terminal, making it an all-encompassing interface (and storefront) for mobile users. The constant connection would also help Facebook shore up ad rates for Messenger, which will start carrying ads this summer. Facebook did not respond to requests for comment.
While reluctant to charge for payments, Facebook CEO Mark Zuckerberg has already floated the idea of partnering with a payments service such as Apple Pay to decrease transaction friction.
"On payments, the basic strategy that we have is to make it especially in products like Messenger that where the business interaction maybe a bit more transactional, to take all the friction out of making the transactions that you need," Zuckerberg said during Facebook's fourth quarter earnings call in January, according to a Seeking Alpha transcript. "So, we don’t view ourselves as a payments business, that’s not the type of company that we are. We’ll partner with everyone who does payment. We look at the stuff that Apple is doing with Apple Pay for example as a really neat innovation in the space that takes a lot of friction out of transactions as well. And our view is that the less friction, the better the user experience, the more people can easily interact with businesses that they care about."
Apple reportedly is set to expand its payments service’s reach through its Safari web browser, and an integration with Messenger integration would bring Apple Pay to about 35% of chat app users worldwide.
Even without such a partnership, Facebook would become a huge competitor for Apple and other companies in the digital payments space—and being able to shop via Messenger would continue to chip away at the reach of search and retailers' apps as well.
