FacePay or PayBook? – Peer to Peer Payments Come to Facebook 
Social Media Marketing

FacePay or PayBook? – Peer to Peer Payments Come to Facebook 

26th March 2015

Facebook has been processing huge sums of money since forever, well, 2007 anyway, but soon they’re taking it to a new level. Processing more than one million transactions per day through ads and games, processing over $3.5 billion just in ads Q4 of 2014, Facebook seem to be ready to move things up a notch.

In the coming months Facebook will roll out peer to peer payment availability across the US. The first reports of such an undertaking were released around October last year, but things have stayed relatively quiet since then with the odd red herring thrown in for good meaure. In hindsight the pinching of PayPal’s president and his mobile payments company for Messenger back in June 2014 was a significant clue I guess…

With Wall Street all excitable, and PayPal probably wondering when their bromance began to sour, it’s not surprising that there are many questions for Facebook to answer.

How Does It Work?

Facebook Payment

If you want to pay someone, the plan is, you simply open up a message to a friend on Facebook and click the new ‘$’ sign button, followed by the amount you want to send, then send it. Job done. Of course, the first time you set this up you will need to enter Mastercard or Visa card details, but they are then stored for automatic use.

If you are receiving money it’s pretty similar. Simply open the conversation, add card details the first time for where you wish the money to go, et voila!

How Long Does Money Take to Come Through?

That will vary from one to three days. If you send money but your friend has not yet set up payments, it will be held with the sender’s bank until they do. Facebook themselves never hold the money. Both the sender and recipient will receive a confirmation message with details of the transaction when it is complete.

How Secure Is It?

Facebook say “We use secure systems that encrypt the connection between you and Facebook as well as your card information when you ask us to store it for you. We use layers of software and hardware protection that meet the highest industry standards. These payment systems are kept in a secured environment that is separate from other parts of the Facebook network and that receive additional monitoring and control. A team of anti-fraud specialists monitor for suspicious purchase activity to help keep accounts safe.”

There are also extra security layers such as optional in-app passwords and the use of Apple TouchID fingerprint.

Messenger will also include a Payment History section.

 How Much Will Facebook Charge to Transfer Money?

Nothing. Direct competitor/friend PayPal of course take a small percentage of the transfer value plus $0.30 per transaction, so in this instance Facebook are already winning. With other possibly less convenient and under used competitors such as Google Wallet and others in the US like Square Cash, and even a Snapchat payment platform called Snapcash, things could get very interesting over the next year. With over 500 million Messenger app users and the acquisition of WhatsApp’s 700 million active users last year, we could be in for another fundamental change to how we send and receive money.

Facebook seem to be focussing on keeping users in the app and tethered to Facebook rather that actually looking to make money out of it…at the start at least.

But PayPal Isn’t a Social Platform, Is It a Competitor Really?

Well, yes, but for two reasons. Clearly the peer to peer payment option with no fees is going to be a blow with a blunt object to PayPal as it stands, there is a little more to it. Little known over here in the UK, Venmo is PayPal’s more social platform, and it does quite well in the States.


Users can invite friends from their phone or Facebook contacts to join, and see each other’s transactions in an equivalent news feed, though not the actual amount of money transferred. They can also add creative or funny comments to the transactions, plus comment and like what they see.

According to The Financial Brand users can “Like a status update, these transactions tell a story about what friends are up to – who went to dinner together, who shared an Uber, who got charged for Oktoberfest tickets, what couples are splitting the grocery bill, all mixed with more mundane explanations about which roommate has the water bill in their name.”

PayPal seem to be skirting round the word ‘competitor’ but have indicated that they will continue to work happily alongside Facebook despite this stab in the back (my words, not theirs!)

What’s Left For Facebook If They Have My Card Details Too? Just My Soul, Or Is There Something Else?

They probably have everything else if you are a fully fleged member of Facebook and the Messenger App. But as always I expect Facebook are mostly looking at advertising potential, same as with everything else they do.

Mobile payment use is increasing fast, why wouldn’t they want a part of that. The convenience of mobile payments in a secure environment, already trusted (questionable), with the convenience factor of the app being used about 6% of the average 20-30 year old’s time online makes for a more adhesive app.

Forrester Research Vice President Sucharita Mulpuru is quoted via Mashable as saying “”If Facebook gets a ton of credit card and payment details, and if consumers could complete transactions for physical goods on Facebook, and if Facebook actually chooses to do so in meaningful ways, they would be able to better target buyers, which could raise their advertising rates”


So, will you be paying your mates via Facebook when the option arrives? Or is this a step too far by the social media giants?


Written By
Laura is a Digital Marketing Consultant with Aira Digital & Advance Promotions. With search experience in a large number of industries both in-house and agency side, Laura has a strong interest in conversion optimisation and web psychology.
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