As things stand, Paypal current holds a significant share of the market for online payments. Most online vendors, including large businesses like eBay and Amazon, support Paypal as a primary method of online sales.
It’s unclear how the future will change with Facebook’s recent announcement of Friend-to-Friend payments.
With Facebook’s new feature, you can connect your Visa or MasterCard debit card to Facebook Messenger. Tapping on the “$” button will allow you to send money on iOS, Android, and or desktop with zero extra fees.
The decision to build a payment system from the ground up was an unexpected decision from Facebook considering they have worked closely with Paypal in the past. Facebook has attempted to make it clear that their new system is not aimed at “replacing” Paypal. Rather, they want a Messenger-specific system that makes Messenger more useful and expressive.
By making Messenger more pleasant, they believe people will be more likely to stumble across ads on their Facebook News Feed which will continue to use the Paypal system for payments. The end goal is to make Facebook Messenger more helpful to the end user. Conversations about splitting bills and sharing expenses are already taking place in Messenger. Facebook wants to simplify how we handle these situations.
Users can tap the “$” button, enter a dollar amount, and hit “Pay”. The money is instantly transferred from their debit account and delivered into the recipient’s debit account. Facebook will never hold the money, though the receiver’s bank account will usually take a few days to make the funds available. Both users will receive confirmation detailing the transfer.
The new payment system will roll out in the US over the course of the new few months.
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