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Facebook Looks to Instagram and Messenger As Payments Revenue Falls

Grace NotobyGrace Noto
April 26, 2018
in Payments, Risk & Security
Reading Time: 2 mins read
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EXCLUSIVE— Facebook is turning to its other platforms, including Instagram, WhatsApp, and Messenger for its experiments with payments, as revenue for that sector fell, the company reported during its first quarter earnings call yesterday.

While the company’s overall revenue and earnings was a quite positive at $11.97 billion in total revenues (a surprisingly upbeat result, given its recent struggles with data privacy and regulators), revenue for payments and other fees was $171 million, down 2% from the previous quarter, the company reported during its earnings slideshow:

Facebook Investor Relations

The company will continue to innovate in that sector, company CEO Mark Zuckerberg said during the earnings call, citing ongoing “tests of payments” on its various media platforms: its flagship Facebook platform, excluded.

Rather, Zuckerberg pointed to experiments on Instagram, WhatsApp, and Messenger, noting that “the point here isn’t to charge for payments. It’s that messaging can be a more transactional medium than feed.”

Zuckerberg said during yesterday’s earnings call:

 So I think what you’re going to start to see are people interacting with pages, maybe follow a page on Facebook or Instagram. You see content from that page. You can click through or tap through to a message thread, and then you can either get customer support or complete a transaction or do a follow-on transaction.

So we view the payment in that context not as the goal, but as something that’s helping the business and the person succeed at having the transaction or doing what they’re trying to do.

Zuckerberg also pointed to some less traditional use cases of payments via social media platforms, like the company’s experiments with Messenger in the Philippines, where users can “buy access to data plans through Messenger,” he said. “So it’s an interesting example of how having payments in messaging can increase efficiency for businesses.”

Facebook shares are trading up nearly 9% at $173.81 per share, as of 1040am ET this morning.

Tags: data securityExclusiveFacebookmobile bankingmobile paymentsonline paymentsPremiumSocial Media
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