While buying a product or service from social media business pages, customers have to either opt for cash on delivery payment or rely on external payment gateways which might be troublesome and effort consuming for both the business owners and customers. But with the launching of Facebook Pay, the largest social media platform in the world has made online payments as easy as sending emoji to your near and dear ones!
At the epilogue of 2019, Facebook introduced its payment tool named “Facebook Pay” to compete with Venmo. Facebook Pay is developed as an inbuilt system across the family of social media services and apps owned by Facebook such as Messenger, WhatsApp, and Instagram. With a new range of services, the Facebook Pay app deems to make payments for businesses much more accessible.
Holding a vision of building a transparent and digital e-commerce economy in the whole world, Facebook has launched the Facebook Pay version in Brazil to help the small and medium businesses in the developing country. The initial trials of WhatsApp Pay had been performed in India and Indonesia. However, the debut country to receive the payment services of Facebook, through its messaging application WhatsApp, has been Brazil only. Being a dominant messaging service for this Latin country along with other developing countries all over the world, the launch of the payment and fund transfer services in WhatsApp will expand its era of usage and ensure high dominance among the states in terms of a financial solution as well. The very much simple interface of Facebook Pay in WhatsApp service has grabbed the attention of Brazilians just after its launching. The user just has to tap the paperclip icon, select the payment option, set up bank account details and select a suitable six digit pin as security code. The payment system integrates the user’s bank account with WhatsApp and the user can transfer funds to friends and businesses which can be then withdrawn through reveiver’s bank account. Through this method, Facebook Pay can make payments trouble-free just like chatting with friends.
Brazil is the second largest marketplace for WhatsApp, with more than 120 million users. With this highly disruptive technology, Facebook is set to enter into a new industry, providing fierce competition to already existing fund transfer platforms in Brazil such as M-Pesa. The concept of developing a messaging app as fundraising as well as fund transfer platform, and it is expected to be highly beneficial as famous columnist Professor Bitnge Ndemo comments. Facebook has also made this feature free for the general users, and a small processing fee of 3.99% will be required for the business owners.
Although Facebook Pay is open and accessible for all in Brazil, Mark Zuckerberg clears out in his statement that it is mostly to collaborate with the small and medium business owners. Before the development of this payment app, the owner of Facebook visited Nairobi to gather knowledge about popular mobile banking services in African region named M-Pesa run by Vodafone. Also, Facebook has been running UPI pay service in India, which is similar to the service launched in Brazil. The long-term goal of Facebook through this in-app payment feature is to help the online SME’s in the developing and underdeveloped countries through ensuring an accessible, secured, and affordable fund transfer system.
Bangladesh is also a growing market for social media usage. Amongst the total population of Bangladesh, almost 30 million people are active on social media as reported in the Financial Express in January 2020, which is nearly 22% of its current population. Adding to this, the national daily reports that the number is increasing at a high rate which was 27 Million in just the first quarter of 2019. Among social media usage, Facebook remains at the top with more than 35 million users.Social media usage in Bangladesh has always seen an upward slope. As the internet usage in Bangladesh and access to mobile devices increased largely in the past few years, the usage of social media has been also on the rise. In 2020, almost 90% active social media users of Bangladesh are accessing social media platforms through mobile phones.
Although in terms of WhatsApp usage, Bangladesh lags, but Facebook-owned social media is still thriving in the country. Due to this factor, many businesses have come online, and now there is hardly any business organisation which does not have an online presence on Facebook in Bangladesh. Statistics show Bangladesh has approximately 2000 e-commerce sites only. But the Facebook commerce or popularly known as F-commerce has continuously been booming in the country with over 50000 online business pages on Facebook selling more than 30000 products daily as BRTC repots. During the last year, around 1000 crore had been contributed by the F-commerce sector reported by the e-commerce association of Bangladesh. This being said, the rise of E-commerce and F-commerce has seen high growth after the introduction of mobile banking and fund transfer services introduced in Bangladesh.
Through the introduction of services like Rocket, Bkash, iPay etc. banking services are now being much more convenient for the Bangladeshi people. As the above table depicts, the only decrease in the mobile financial service providers has been in the number of banks providing these services. On the contrary, the number of total transactions, daily transactions, daily average transactions through these services have increased in a very high percentage in the last three years. However, these are third-party applications that cannot be integrated with the F-commerce sites; instead, the payment has to be made externally by the customers. Online news portal Bangla Tribune reports that in 2019 only, nearly 400 agents of these payment service providers have been arrested for fraudulent practice and more than 2000 are still on the run. If Facebook Pay is introduced in Bangladesh through the Messenger app, then it would be highly beneficial for the business organisations as well as the consumers for a seamless affordable transaction process. However, to make the Facebook Pay service reliable and accessible to Bangladeshi users, Facebook should opt for Messenger and Instagram fund transfer service over WhatsApp as those have quite a significant market share in this country’s social media user base. As per Bangladesh Bank, Bangladeshi banks should own 51% share percentage of such payment services to be authorised in this country. If Facebook wants to opt for introducing its payment service in this country, the best option can be to conduct a merger with banks operating in Bangladesh. But it may face tough competition to already established mobile financial services of Bangladesh which are being used by the users largely.
Despite the high potential of Facebook Pay in Bangladesh, there remain questions regarding the safety and security of data and the acceptance of this new financial system in the country. Facebook has faced legal charges for data theft of 30 million user accounts in 2018, which has had a severe impact on its reputation. Bangladesh has advanced forward much in terms of On top of that, there are continuous rumours regarding data breach through Facebook. Being a far more sensitive aspect, the fund transfer system in apps will include user’s account information and security codes which might be at risk if Facebook does not take care of the security aspect properly. If the service ensures high-level encryption and security, F-commerce will see a new era of digital business, and from viewing products, to making the final payment, everything can be done by the customers effortlessly.