What is David Marcus’s plan for payments across Facebook and Messenger?

Everyone has been asking around... "What's David game plan?" needless to say, very few would actually be privy to it. So, here's my take on where David Marcus plans to go with Facebook and Messenger.

David's origins must not be forgotten, i.e. Zong Payments. He understands the world of payments via mobile very well. His entry into PayPal was also remarkably successful. From what's I've read about him, he seems to be having two traits, which heuristically I will sum up below:

• He's all about dividing and prioritizing markets. That is to say, he will not be like another Scott Thompson (Ex-PayPal) and expand into every conceivable market (read: country).
• Secondly, he is all about leveraging more revenue per user.

SHORT-TERM GOALS (within 12 months of Launch)

Prediction # 1: Geographic Roll-out

With this in mind, whatever payment solution Messenger rolls-out, you can bet, it will be US first and then add markets like Canada, Australia, NZ, UK, and some countries in Europe (Spain, France, Germany, etc.).

If you are expecting Messenger to expand into China, India, Brazil, Japan, etc., forget it. That will most likely not happen in the initial plans.

David took the same approach in Zong and PayPal and he will probably stick to this strategy, as it a proven strategy and one that is pragmatic.

Prediction # 2: WeChat Wallet Look-a-like

There will be a Messenger Wallet.

There can be no doubt, that the payment mechanism would be a look-a-like of Tencent's WeChat wallet.

The Messenger platform as of today, is being shaped and crafted as an independent app. It was disconnected from the Facebook App (if you are on the mobile, you will notice, that any message you receive on your Facebook App, will now have to be opened in the Messenger app).

The question now arises, what sort of Wallet functionality will it have? David understands the power of micro-payments (from Zong and the gaming platforms, where 100s of Millions of transactions are done). So I think it will be a natural extension of Facebook Credits. Here is what I think will be in the wallet.

• Bank and Mobile Carrier agnostic wallet.
• Be able to add your cards to the wallet
• Credits. You would be able to buy credits (or just US Dollars) loaded and be able to pay for games, etc. on the FB platform.
• Online Shopping: You would be able to shop and pay for on any FB hosted shopping store.

Prediction # 3: Person-to-Person Payments

In the initial launch, if you are expecting Person-to-Person payments, I am going to take a big gamble and say it will not be offered in the initial launch.

P2P payments have a whole lot of regulatory, risk, compliance and transaction monitoring and management systems on the back-end. If we get to see a Messenger wallet by Summer 2015, chances are it would not be included.

Prediction # 4 (Bonus): Issuer

The Messenger app would also be issuing a VISA/MasterCard prepaid card (virtual &/or physical).



MEDIUM-TERM GOALS (within 1-2.5 Years of Launch)

Prediction # 1: Person-to-Person Payments with Advance ID

P2P payments will be enabled. This would also include upgraded identity management and verification using biometrics (and biometrics does not necessarily mean fingerprints).

Advance biometrics now include ultra-sound, that can be packed on to a very small footprint and can deliver unique ID features that are perhaps more secure than the fingerprint.

Prediction # 2: Merchant Services

Offering merchant services to all those who host and sell on Facebook Pages. This would be a big blow to companies like Shopify and/or Volusion, etc.

Prediction # 3: Expansion to Developed Markets

Expanding the offering to North America, ANZ Region, Japan, Hong Kong, UK/Ireland, Continental Europe and perhaps South Africa.

Bonus would be Brazil and India.

Prediction # 4: Accepting Bitcoins

The Messenger Wallet would be able to accept/trade Bitcoins.

Prediction # 5: American Express / Western Union Alliance

Chances are the Messenger app would also become an issuer by partnering up with American Express and be able to offer the Amex Blu/Serve Card.

You will also see some kind of a holy alliance with one of the big names in Money Transfers, either with Western Union or Money Gram.

Prediction # 6: Integration with Wallets in China

The Chinese Mobile Wallets cannot be ignored. Messenger will try to integrate with one of the leading wallets in China. This would be the first time a cross-platform wallet integration would be done.

Prediction # 7: Pay with your Phone

For devices equipped with NFC, the Messenger app will allow you to pay at any MasterPass and/or VISA's NFC enabled terminal. Just as Apple Pay will allow you to pay at any NFC enabled terminal.

Payments via QR code (as being done by WeChat) would also be possible. In fact, expect QR code based payments to pick up significantly.



LONG-TERM GOALS (within 3+ Years of Launch)

Prediction # 1: Wallet Agnostic Payments

P2P Payments with any wallet would be possible. Doesn't matter if you don't even have a wallet. Have a phone number? have an email? user some other communication messenger? That's all that the Messenger app would need to be able to send you money.

If you're using say Google Talk, via the Messenger app you would be able to send money across to the other person. The payout mechanism would be plenty.

Facebook already has all the money transmitter licenses in the US and EU (as a PI - Payment Institution). This would enable them to do cross-border money transfers with ease. In doing so, FB would already have had payment network linkages with the vast majority of payment systems in the world.

Prediction # 2: Using rails like Ripple or Stellar

There is no doubt that payment rails like Ripple (payment network) or Stellar (payment protocol) would be something that FB will incorporate. They could even fork and implement something entirely of their own. But a modern payment rails mechanism that has the characteristics of Ripple or Stellar would definitely be implemented.

Prediction #3: Pay with Facebook Messenger

Just as today we are used to logging into 3rd party services using our Facebook credentials...


We would be able to pay using our Facebook Account as well. This would be tokenized, and safe/secure, pretty much as the Apple Pay is today.

These are my main predictions. Its only a matter of time when we will see what comes out of them.

I do believe that Facebook Payments or Messenger Payments will not step into the physical retail space immediately. If they do (directly) that would be a huge surprise. I for one believe that they might partner up with someone in the retail space to accept Messenger payments. But if the phone app includes the NFC payment option (which I am sure it will), then on the retail side, FB will be quite content to be on the pay side of things, rather than the merchant side of things.

For further reading:

• What David Marcus jumping ship means for Facebook and the payment's world
• Facebook forays into the world of online payments?
  
• What will be Facebook's payment strategy?