Should Facebook be in the business of sending money? (TechRepublic)

Soon, it will be possible to send money via the Facebook Messenger app. Here are the details about the plan and why they're doing it. 

Very soon you will be able to send money to your Facebook friends via the Facebook Messenger app. This feature should be available in an upcoming update to the Messenger app--however you will not see it available within the app until you've associated a method of payment in your Facebook settings.

In order to achieve this, Facebook hired the president of PayPal, David Marcus, to lead the Messenger efforts. Mark Zukerberg believes that both Messenger and WhatsApp will wind up being big money makers for Facebook.

What is confusing about this proclamation is that Facebook product manager, Steve Davis, has gone on record to say that Facebook does not plan on building a payments business nor are they trying to make profits from payments.

Then why bother?

Simple--Facebook wants to keep users on Facebook. Until now, if a Facebook user wanted to send a payment to a Facebook friend, they had to leave the Facebook app or site and head over to the likes of Paypal. Facebook obviously wants to retain those users within the great walls of their massive social platform.

So this new payment system is a win-win for everyone ... so long as the payment system is secure. Facebook has added a layer of security to the sending of money. On Android the sending of funds will require a PIN and on iOS it will require a fingerprint.

NOTE: It is unclear where the PIN/fingerprint action will come into play for the process of sending money.

But why roll out a feature like this if you're not going to profit from it? My guess is that Facebook has big plans for their payment system--in the form of purchasing products from third-party sites and allowing users to quickly boost posts (for advertisement purposes).

If you're interested in using Messenger to send funds, here's what you need to know:

1. First you must add a form of payment (Visa, Mastercard, Discover) to your Facebook account
2. Once you've added a form of payment, you will see a $ icon when composing messages to Facebook friends
3. Tap the $ icon, add an amount to send, and send

Here is a Vimeo video showing the process in action.

In order to receive the funds, the user will also need a credit card associated with their Facebook account.

The one major issue I find in this is Facebook's track record with security. How often have you witnessed friend's accounts get hacked? Too often to hand over your credit card information, if you ask just about any user. That, of course, is a shame--because this service could be a huge win for the social networking giant. Having the ability to not just send payments to friends, but be able to pay for products and services within the walled garden that is Facebook, would extend Facebook beyond that of just social networking. But until Facebook can prove their service is secure, I cannot imagine people lining up to use Messenger as a payment service. Consider that the average user already doesn't trust digital payment systems and it becomes clear that, out of the gate, Facebook is in for a bit of a struggle to get this system adopted at the scale they'd like to see.

But, if anyone can convince its user base to work with a service, Facebook might be the one. The addition of payments to Messenger could very well be the tipping point mobile payment systems have needed. Apple Pay and Google Wallet could certainly benefit if Facebook Messenger payments takes off. All Facebook has to do is get over that hump called security and Facebook Messenger payments would be cleared for serious takeoff.