Facebook Messenger is introducing a new function, called “chat assist,” which will use machine learning to prompt users to undertake specific tasks based on what they say in Messenger. For example, when it comes to payments, if a user says a phrase like “IOU” or “send me $10 for lunch,” Messenger will then prompt the user to make a peer-to-peer (P2P) payment via debit card or other payment information, according to TechCrunch. The move is likely another step to encourage users, who can opt in or out at anytime, to make payments through Messenger.
The addition of prompted payments could help increase usage of Messenger’s payments service among the app’s 1 billion users. Facebook has included payments functionality since March 2015, but it’s likely usage has been relatively slim due to the popularity of third-party apps like PayPal, Square Cash, and Venmo. There’s a risk that the reminders could annoy customers that use third-party apps. But promoting the service in chat could make a wider base of users more aware of the offering, which could increase the level of adoption. And by putting the service directly in front of the consumer at an opportune time, Facebook is making P2P convenient to users, which could increase usage and engagement. Chat assist payments could ultimately grow Messenger’s P2P user base while increasing engagement.
And that ultimately could help Messenger in two ways:
- Monetization: P2P is a low-friction way for firms like Facebook to get customers to upload their payment information to the application. But P2P itself is hard to monetize, which means that Facebook is likely seeking out next steps for commerce. Getting more users to add payment information and spend could help Facebook get more insight into consumer commerce behavior that could be used later on to attract advertising partners.
- Competition: Competition in the P2P space is heating up, particularly since many platforms are joining the ecosystem but no one provider holds a majority. Making it easier to attract and engage users, like chat assist has the potential to do, will become key in gaining ground.
John Heggestuen, managing research analyst for BI Intelligence, has compiled a detailed report that explores the market for P2P payments, how they work, and the types of businesses that are offering these services and why.
Here are some of the key takeaways from the report:
- We estimate that US annual peer-to-peer (P2P) payments — informal payments made from one person to another — reached over $540 billion in 2014. These payments were made by cash, check, digital money transfer, or other means.
- Mobile P2P payments are having a huge impact on this informal economy and diminishing the need for cash and checks. We forecast that mobile P2P payments will grow to $174 billion during the same period. That means that 30% of P2P volume will be paid via mobile, up from 1% last year.
- There are four types of businesses making major moves in mobile P2P payments: social messaging companies, banks, card networks, and other payment companies. Each of these types of companies has its own objectives and strengths in offering mobile P2P payment services which we explore in the report.
In full, the report:
- Forecasts the value of total and mobile P2P payments made in the United States through 2019.
- Explains the networks that P2P payments providers use to move value from one person to another.
- Analyzes why mobile P2P apps are seeing such a rapid uptake among millennials and other demographics.
- Explores the disparate objectives different companies hope to achieve by offering these services.