What are Facebook payments?

In March, social media giant Facebook officially announced it was going to launch a new payment service through its messenger application. Users can now send friends money through the app for no cost after entering an optional PIN or touch ID for extra layers of protection.

What are Facebook payments?

Current Facebook users can link their debit card to the messenger app's settings section and send mobile peer-to-peer payments to their friends by striking up a conversation. Once two friends engage in dialogue, a "$" icon will appear above the keyboard. All users have to do is enter the amount they wish to transfer and select the pay option.

Facebook payments users can also fund and complete transactions to third-party companies that advertise on the platform as well. Once the payment is successfully processed, Facebook transfers the value of the transaction to the developer offering the content the consumer wishes to purchase.

Users can only enter their debit card information because the company said it wanted to minimize and avoid fees as much as possible. Similar to bank transactions and deposits, payments could take up to three business days to go through. Facebook is looking to explore the popular mobile payments space and keep users on its site longer. According to its F8 developers conference in March, its messenger app was used by 600 million people worldwide (1).

What does this mean for ecommerce businesses?

For one, Facebook payments provide a direct link for your ecommerce business to the consumer. Since their debit card information is already linked to the platform, the payment is seamless and easy to use. Facebook is already a major advertising platform, and now that users can link their payment information to the social media outlet, they can make purchases more quickly and easily than ever before.

In addition to creating a seamless payment funnel for consumers, Facebook payments also open up a world of opportunities for its advertisers. Facebook already sells individuals' personal information to companies that market on its platform, and it's likely your ecommerce business can obtain individual card numbers and purchase history as well. By getting this information, your online business can better optimize its outreach to consumers, sending more relevant messaging and offers. This type of customized marketing approach may gross higher bottom-line gains as a result.

1. "We talked to 2 dozen millennials about Facebook and its new Messenger platform - here's what they told us"