Facebook's Messenger payments looms over Australia's big banks

Facebook’s challenge to Australia’s big banks is coming as early as next year, when the social media giant is expected to introduce peer-to-peer payments within its Messenger service, hot on the heels of local banks’ expected launch of their own P2P payments network.

In July, The Australian Financial Review revealed Facebook had been awarded a patent to allow it to launch Messenger payments in Australia, which will allow users to pay family, friends and groups once they have linked up a bank-issued debit card to their social media account.

More than 13 million people use Facebook Messenger in Australia each month, a figure that will have local banks – who have invested more than $1 billion in their own P2P payment platform – worried the Silicon Valley giant will vacuum up their customers.

Sources said Facebook is targeting a 2018 launch in Australia, however the introduction is dependent on a number of regulatory requirements being met in time.

Facebook vice-president of global marketing solutions Carolyn Everson told the Financial Review the company was excited about its payments service but did not have an announcement to make with regards to Australia and confirmed it was looking at global expansion.

“We obviously have payments in the United States … we are looking at all markets,” she said.

“Our goal would be to deliver a seamless and frictionless consumer experience that will not only be transformational for peer-to-peer and consumer but also how consumers can interact with businesses. But it’s complicated. It takes time. It’s country by country. And so I have nothing to report for Australia specifically but I can tell you that we’re very bullish overall about payments.”

On November 7, Facebook launched Messenger payments in Britain and France, marking the second and third markets it has expanded the service into, the first being the United States. Facebook launched P2P payments in the US in 2015 after hiring former president of PayPal, David Marcus, as its vice-president of messaging.

The Reserve Bank of Australia’s Payments System Board is the payments regulator in Australia but it may not have to formally approve Messenger payments, industry sources said.

As long as Facebook makes an agreement with a payments gateway and acceptance service to facilitate access to Australia’s payments infrastructure and abides by the Australian Securities and Investments Commission’s consumer codes of conduct, it will be able to begin offering payments through Messenger.

Messenger payments would compete directly with the new, real-time payments network known as the New Payments Platform, which has been in development since 2013 and is expected to go live in early 2018.