I am trying to imagine what will happen to the mobile money transfer business after the world’s largest social network, Facebook, announced its entrance in the market on Tuesday.Facebook has given its users another reason to use its messaging service, even as competitors pile on features. Is the coming in of Facebook in the market going to affect Nettcash, OneWallet, Telecash and Ecocash?
The social-networking service on Tuesday said Facebook friends can now send cash to one another for free, after they’ve connected information from their MasterCard or Visa debit card accounts. Users activate the feature by tapping a dollar sign while chatting with a friend in Facebook’s Messenger app. About 500 million people currently use Messenger.
The payment feature could help Facebook dominate mobile app messaging. At the end of last year, the social network tallied nearly 1.2 billion monthly users logging on from a mobile device, but less than half use the company’s Messenger service. Facebook last year acquired Whatsapp for more than $19 billion, which counts 700 million users around the world — but doesn’t offer payment services.
Meanwhile, competitors, such as Snapchat, have grown from tiny startups to monsters of the industry, in part by tying into new trends among younger users. Snapchat is particularly popular among the 14- to 34-year-old set, according to industry researcher eMarketer. That age group also happens to be the largest without a bank account, according to surveys by the Federal Deposit Insurance Corporation.
Coming back to our local scenario, mobile money transfer providers like Ecocash, Telecash and OneWallet are primarily targeting everyone with no access access to bank accounts. The services are coming with charges that are regarded as high by subscribers.
Facebook, will come with an edge over these service providers as it comes with no charges. This obviously will be a stiff competition among the mobile money transfer providers who rely on siphoning its users.
Mobile payments are also becoming one of the biggest trends in Africa. Zimbabwe has also fully embraced the service and this has resulted in many people ditching the traditional banking system.
Apple introduced its Apple Pay service last year, allowing iPhone and (soon) Apple Watch owners to tap their devices to point-of-sale terminals at thousands of merchants. Competitors Samsung, Google and PayPal also offer similar features — or soon will.
According to the report, Facebook is already processes more than 1 million transactions on its site each day, and plans to use security features it’s been building for payments services on its website since 2007.