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Facebook Messenger Adds Peer-to-Peer Payments Feature

Messenger's long-rumored payments product has arrived.

Facebook users can now send money to one another through the company’s standalone messaging app, Messenger.

The long-rumored product was unveiled Tuesday, and lets users tie their debit card to their Facebook account in order to pass money through messaging. The Messenger app now includes a small “$” icon above the keyboard which opens a payments screen where users can type the amount they wish to send.

The money is then transferred through Facebook, which holds the money for “seconds” before sending it along to the other user’s bank, according to Facebook product manager Steve Davis. If the recipient doesn’t have a card attached to his or her account, Facebook will hold the money until they’ve set one up.

The new product makes Facebook an instantaneous competitor to other peer-to-peer payments companies like Venmo, Square and even Snapchat, which rolled out a similar pay-through-text service in November called Snapcash.

“We realized that there were all these conversations [on Messenger] that were forced to go somewhere else in order to actually finish,” Davis said. “You had to go to another platform to actually pay another person.”

Unlike Snapchat, which partnered with Square to handle the actual money transfers, Facebook built its entire system in-house. That means that debit card info will be housed on Facebook servers.

The company has stored data like this for years already when people pay for games or gifts through the platform. Messenger payments are a good way to get more debit cards on file in case Facebook does decide to expand further into commerce later on; the company is already partnering with Stripe to power the Buy button, and that test is likely to expand.

Facebook did add extra safety for Messenger payments: A user PIN or Touch ID, if the user is on an iPhone. No payment can be sent without that PIN, which the user will create when they set up their account (or with the thumbprint scan). Users could opt out of this feature if they want to, but will be prompted to create one at registration, Davis says.

The product won’t come as a shock to people who have followed Facebook closely. Last summer, Facebook hired PayPal’s David Marcus to run all messaging products, and in the company’s subsequent earnings call, CEO Mark Zuckerberg hinted that payments were on the way.

“Messenger will have — over time there will be some overlap between that and payments,” he said during the call.

One thing that could make Tuesday’s announcement a little surprising is that Marcus has said in the past Facebook doesn’t plan to build a payments business. Davis echoed that sentiment to Re/code.

So what’s the difference between a payments product and a payments business? Revenue, says Davis.

“We’re not trying to make a profit out of payments,” he said, adding that Facebook offers lots of tools like stickers and photos but it’s not a stickers or photos business either.

Facebook is not charging users a transaction fee to pass money back and forth. So for now, the company isn’t using Messenger payments for revenue. You could imagine, however, a time in the future where you could pay for other goodies through Messenger, like your movie tickets or a gift for a friend.

Davis declined to comment on the future of the product. The product will be a “phased rollout across cities in the U.S.” on iOS and Android with international cities coming down the road, according to a spokesperson.

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