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Facebook: Getting Serious On Payments


Facebook is looking to double down its mobile payment platform by allowing Messenger users to buy things in-store.

Positive implications for FB as it scales up its Messenger platform to rival Asian apps such as WeChat.

Remain bullish on FB. Messenger economics not factored into the stock price.

Reports indicate Facebook (NASDAQ:FB) is looking to double down on its mobile payment platform by letting FB Messenger users buy things in-store. This puts Facebook in direct competition with Apple (NASDAQ:AAPL) Pay and Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) Android Pay. Other features include "secret conversation," which may allow users to hide threads within Messenger, however the payment functionality deserves extra attention. For anyone who has followed the evolution of WeChat, they can easily see where Facebook is going with the Messenger app.

As I argued in my outlook piece (see - Facebook: 2016 Outlook - Messenger And Virtual Reality The Key Catalysts), enhancing Messenger to be competitive against Asian messenger apps such as WeChat, LINE and Kakao will be a priority, and the payment function will be a critical component of that strategy. To create a mobile messenger ecosystem with services such as travel booking, restaurant booking, mobile commerce, taxi booking, on-demand services, movie ticketing and so forth, Facebook needs a robust payment infrastructure that supports all these services and facilitates user convenience. Facebook's network effect certainly works in the company's favor in that offline merchants...