Facebook Pay

Send money to your friends via Messenger

#4 Product of the DayMarch 17, 2015
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Big move (and seems inevitable). I'm curious which demographics Venmo has reached. As it becomes more widely adopted within specific segments, the networks effects make it more useful (all my friends are on it so asking "may I venmo you?" is rarely an issue). Of course, Facebook is practically everywhere. cc @pzakin @brachowin From what I've gathered, you can only use a debit card and Facebook doesn't charge for the transaction (yet). P.S. lol P.P.S. Everyone's getting into payments
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@pzakin @brachowinFrom @rrhoover Seems like comfortably getting people to enter CC's is the goal, and later be able to frictionlessly purchase something else. Nothing more comfortable than entering a card # b/c you want to send a friend money. Doubt charging per trans is going to be their thing.
@rrhoover in a completely unscientific study of my feeds, I see the majority of Venmo users as my younger (read mid-20s) friends who are also barely using Facebook anymore
re: demographics. Venmo's demo is pretty much what you think it is: the core is college campuses and cities with early tech adopters, e.g. NY + SF. They've seen significant growth over the past few years so it's expanded outside of those base groups, but I'd say the core base is still millennials in higher tax brackets. FWIW i don't think this is as bad for Venmo as it might seem. Here's the bullish case for Venmo: 1. Inertia. Venmo has built a network of users who have trusted Venmo with their financial information. P2P Payments behaviors have strong inertia for a variety of reasons including: trust, switching costs, knowing that the person I'm paying can receive and conveniently cash out, social habits etc... Yes, Facebook has significant advantages in distribution. But so did Google Wallet and while you can point out relevant differences between G + FB’s efforts in payments, it remains true that distribution ability isn’t enough to build a successful p2p payments network (I’m similarly uninspired by snapcash). 2. Never underestimate the power of college campuses. Fresh batches of 1000s of people each year ready to absorb the established behavior patterns of those around them: this was famously important for Facebook. Also a big deal for Venmo. 3. Mindshare. It makes for a compelling product story that you might receive a message from your friend asking you to pay him back and wouldn’t it be cool to be able to pay them back within that same context…. But realistically the pay-back use case is more frequently prompted outside of digital contexts. For example, when I go to dinner and need to split the bill with friends I’ll open up the app that I think best accomplishes that task. RIght now that’s Venmo... I concede that Messenger could eventually seize that mindshare from Venmo and become the app I pull out of my pocket when I need to pay someone. But the advantage there has nothing to do with the context advantages of Messenger (interesting point of comparison is gmail payments). Messenger is on track to become one of the most important software platforms in the world but I actually don’t think p2p payments is a particularly interesting avenue for messenger. Historically, p2p payments have only been interesting as a way to acquire cards and enable merchant transactions. Facebook doesn’t need p2p payments to go down that path. In other words, the prize to win for Messenger is orders of magnitude bigger than beating Venmo. But even so, this is probably the most credible threat to Venmo’s efforts in US. (Disclosure: I used to work at Venmo and am as much a Venmo fanboy as ever)
My reaction: SO COOL! Oh, US only 😒
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i think this makes a TON of sense for FB. Square Cash is one of my favorite products and everyone outside of SV that i introduce it to is amazed how simple it is. But it's just not spreading. Venmo is unknown outside of SV, even though it's a great product. (EDIT: I should have said "Venmo isn't widely known, especially outside of tech heavy cities. Facebook is known everywhere.") It's 10000x easier for me to say to someone "I'll send you cash through Facebook" than "I'm going to send you cash through a service called Square Cash. Square Cash is..." This will do very well. I'm a bit surprised this is limited to messenger and not just part of Facebook in general. I'm sure it'll get there. The only big issue I see FB facing is people dont trust FB with their personal data. So not sure they'll trust with credit card. But if FB can overcome that hurdle and get their userbase to all connect credit cards to their accounts OMFG that opens up opportunities to them down the road. cc @rrhoover
@mulligan I'm not sure how trustworthy Facebook is for most people. While they've made mistakes here in the past, are they really perceived as less secure or ethical than lesser known brands like Snapchat, Square, or some new startup that asks for our credit card info?
@rrhoover @mulligan By the way Venmo is used fairly often outside of SV, I go to school in upstate NY and it is the de facto standard for money exchanges not in cash. I do think however that Facebook will be able to change this. Younger kids (teens to early 20's) don't have the same worries that others do about credit card numbers, to them its sort of the same as sharing an email address.
@rrhoover @mulligan Yeah, my friends are like what is venmo, and are too lazy to set it up after I tell them what it is; whereas for FB Pay, it's already built on top of a platform many people use daily :)
Millions of currently unbanked people worldwide will now be able to send money around. Starting with peers, later to businesses. Being able to use identity & payments is an essential component to participate in society. Very exciting move!
This is awesome. We dropped Venmo payments into chat on Dasher not too long ago, and it brings about all kinds of surprising behavior. - Making it frictionless to make small payments in messaging has started people paying each-other a penny or two for having a great hair day, or reporting a bug, etc. Maybe the first actual micropayments scenario I've seen work out. - Just last week, two companies that I know of were seed funded over Dasher (!!!) after chatting through a pitch. So much interesting behavior is emerging. Pretty excited to see where this goes with an audience like Facebook's.