Helping PayPal reach a broader audience, Facebook is now inviting U.S. consumers to use the payments service directly from Messenger. Having formerly served as president of PayPal, Facebook Messenger head David Marcus is no stranger to the payments space.
Facebook Messenger launched its own peer-to-peer -- or friend-to-friend -- money transfer service in 2015.
Challenging established players like PayPal, a flurry of newcomers have thrown their hats into the peer-to-peer money-transfer ring. Along with Square Cash and Venmo, Snapchat (albeit with the help of Square Cash) debuted Snapcash service in recent years.
This is no surprise, considering all the money that is flowing into the market. In fact, peer-to-peer payments will more than triple from $5.2 billion last year to $17 billion in 2019, per a forecast from Forrester.
As of April, Facebook Messenger boasted more than 1.2 billion monthly active users.
Despite their popularity, however, Facebook has struggled to monetize its messaging services like Facebook Messenger and WhatsApp.
“Although Messenger is widely used … consumers have been slow to warm up to the idea of interacting with chat bots and paid advertising in messaging applications,” eMarketer principal analyst Debra Aho Williamson said earlier this year.
“Facebook has faced scrutiny in Europe over its plan to merge data from WhatsApp with data from Facebook,” Williamson noted. “These scenarios tell me that generating significant ad revenue from Messenger and WhatsApp is still a ways off."
For the first quarter, PayPal reported a net income of $384 million, or 32 cents per share, while revenue jumped 17% to $2.975 billion, year-over-year. That beat Wall Street’s revenue expectation of $2.94 billion.