Want an easy way to send money to your friends? Facebook hopes you'll turn to its newly beefed-up Messenger app for that, instead of relying on a growing list of competitors trying to siphon off its users.
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 new feature helps Facebook stave off a growing list of competitors. Square, for example, partnered with Snapchat in November, giving users of the ephemeral messaging service an easy way to send cash to each other. PayPal's Venmo and Square Cash also link to users' debit cards, making it easy to split a bill among friends.
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. These new payment services could help to change that.
Mobile payments are also becoming one of the biggest trends in Silicon Valley. 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.
Facebook said it 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.
The feature will become available to iOS and Android users in the coming months, the company said.