Facebook does not view itself as a payments company and is looking to partner with banks and other players in the market as it considers the role of payments and Open Banking solutions across its family of apps.
Speaking at the Money20/20 conference in Amsterdam, Paulette Rowe, Facebook’s head of payments and financial services partnerships - and previously head of Barclaycard - said growing use of Facebook as a platform for commerce, particularly in Asia, was accelerating discussions over its role as payments facilitator.
“I think it’s taken Facebook a little bit of time to recognise that commerce was a legitimate thing to support on our apps,” she explained.
“But of course if you’re going to do commerce, then you have to do payments, you have to remove that friction, and so that’s something that we’re very focussed on,” she added.
The social media firm, which also owns WhatsApp and Instagram, has launched a beta trial of in-app payments with selected US merchants through the Instagram Checkout function, with plans to roll the feature out more widely if it proves successful.
However, Rowe was keen to point out that Facebook would not be able to create the infrastructure in-house that it needs to support payments services to its 2.7 billion users worldwide, and is exploring ways in which partnerships could help achieve ambition to launch in-app payments.
“One thing that I haven’t touched on that it is extremely important is that at Facebook we don’t believe we are a payments company, we don’t believe we have the skills to be a payments company, but what we do want to do is to partner,” she said.
“Part of my job is spending a lot of time talking to processors who can help enable these propositions for us, but also the ecosystem in general talking to banks and other financial institutions to just figure out how do we crack this, because actually I think it’s win-win if we can start to create new ways to pay in places where your customers - if you’re a bank - are already spending their time,” she explained.
Rowe explained that the company’s philosophy when it comes to sending money: “Should be that you can send a payment as easily as you can send a photo.”
The comments come after it was reported that Facebook is planning to launch its own cryptocurrency and digital payments service in around a dozen countries in 2020.
Asked about a potential role for Open Banking protocols and financial data sharing in Facebook’s plans to build a payments ecosystem across its apps in future, Rowe said that existing card rails would continue to play an important role, but added that account to account and bank account to bank account, along with instant payment solutions, open up a “really important” opportunity.
“So I start with the thought that actually Open Banking could be incredibly interesting for Facebook and the family of apps to bring these propositions to life,” Rowe commented.
However, she cautioned that Open Banking also brings with it a number of challenges for integration with apps numbering billions of users and covering a number of markets with different and complex sets of financial regulations.
“I think the challenges we see with Open Banking... is just how complex it is and how fragmented it is, all the conversations I’ve had, we are inching towards something,” Rowe said.
“But the challenge for us where we’re trying to find solutions constantly across 200 countries where Facebook is active, is that we can’t see a way in which we can have a single solution API that will allow us, even in the EU, to actually solve our solutions and problems."
However, she was keen to stress, that while the thinking is being done about possible use cases for Open Banking, finding a solution that works across Facebook’s global reach remains to be found.
“It would be great to feel that we could have a single banking API solution that takes us from Germany to Spain etcetera, but that feels a very very long way off,” she concluded.
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