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Integration of Payment Solutions into Mobile Messaging and Social Media

By Mike Faden

Mobile messaging and social media apps are increasingly incorporating online payment capabilities as part of a trend to integrate electronic payment services more broadly into a wide range of business's and consumer's daily activities. The world's five most widely used messaging apps, as measured by Statista, all have added the ability to make payments in at least some countries.1,2,3 The integration means that businesses and consumers can send and receive payments without having to switch to dedicated mobile payment solutions or banking apps.4

Why Mobile Payment Solutions are Moving into Messaging Apps

 

Messaging apps are some of the world's most widely used applications, and usage continues to grow. According to market-research firm eMarketer, more than three quarters (76.3 percent) of the world's smartphone users were expected to use at least one messaging app in 2017. The company expected the number of users to grow more than 15 percent during 2017, reaching a total of 1.82 billion worldwide, with the bulk of new users coming from China, India, the U.S., Indonesia and Brazil.5

 

Furthermore, users spend a lot of time in messaging apps. According to an analysis of Android smartphone usage by SimilarWeb, U.S. users spent an average of roughly 30 minutes a day in some of the most popular messaging apps. The average time spent in top apps was even higher in some other countries.6

 

Social media usage statistics are equally impressive: according to Statista, there were nearly 2.5 billion social media users worldwide in 2017. The same company estimated that in 2016, U.S. users spent more than 215 minutes a week using social media on their smartphones.7

 

Because users already spend so much time communicating via messaging and social media apps, it's logical to add the ability to send money, experts say.8 For suppliers of messaging apps, adding mobile payment solutions provides a new way to attract users in an increasingly crowded marketplace, and to get them to spend more time using the app.9 And particularly since many messaging apps are free to users, the addition of mobile payments services may provide a way to generate valuable revenue, according to reports.10 Integration with messaging apps is equally attractive to online payment solutions providers, which see the apps as a way to facilitate and increase use of their payment services, experts say.11

 

At the same time, users have become more comfortable with making payments from within mobile apps, thanks in part to the proliferation of services such as Uber, which users typically access and pay for from their smartphones.12 And standalone mobile payment solutions from fintechs and established financial-services companies have been taking off, helping to drive rapid growth in peer-to-peer payments and making the opportunity for mobile payments within messaging apps even more attractive.13 Estimates of that growth vary widely, but BI Intelligence predicts that U.S. mobile peer-to-peer payments solutions will grow from $60 billion in 2017 to $336 billion in 2021.14

 

China and India Lead Key Developments

 

More mobile phone users in the Asia-Pacific region used messaging apps in 2017 than in any other region of the world, according to eMarketer.15 The proliferation of mobile messaging and mobile payment services in the region is due in part to China, which is by far the world's largest mobile payments market; it generates mobile payment volumes many times larger than the U.S., according to estimates by U.S. and Chinese market-research firms.16 China's largest internet companies have been instrumental in driving that growth, with early moves to integrate mobile payment solutions into messaging and social media apps.17

 

India has also recently moved rapidly to adopt mobile payments, spurring the uptake of apps that interface to the country's national payments infrastructure. In response, Indian versions of some of the world's most widely used messaging apps have begun to include mobile payment capabilities; in competition, some local payment applications have also reportedly added messaging features.18

 

The

Takeaway:

An increasing number of messaging and social media apps are integrating the ability to make payments to businesses and consumers. Experts say that the integration of mobile payment solutions may help messaging providers capitalize on the rapid growth in mobile payments. By adding payment services and other functions, messaging app providers can offer a broader suite of services in a single platform, potentially attracting more users, increasing the amount of time users spend with the app, and generating more revenue.

Mike Faden - The Author

The Author

Mike Faden

Mike Faden has covered business and technology issues for more than 30 years as a writer, consultant and analyst for media brands, market-research firms, startups and established corporations. Mike also is a principal at Content Marketing Partners.

Sources

1. “Most popular mobile messaging apps worldwide as of January 2018, based on number of monthly active users (in millions),” Statista; https://www.statista.com/statistics/258749/most-popular-global-mobile-messenger-apps/
2. “More social media apps have become payment apps — even Skype,” MarketWatch; https://www.marketwatch.com/story/why-companies-want-you-to-pay-for-stuff-everywhere-even-skype-2017-08-02
3. “Why messaging apps are striking gold with peer-to-peer payments,” Mobile Marketer; https://www.mobilemarketer.com/ex/mobilemarketer/cms/news/messaging/21840.html
4. “Chat and pay: How social media is beating the banks,” BBC News; http://www.bbc.com/news/business-42237432
5. “Messaging App Usage Worldwide: eMarketer's Updated Forecast, Leaderboard and Behavioral Analysis,” eMarketer; https://www.emarketer.com/Report/Messaging-App-Usage-Worldwide-eMarketers-Updated-Forecast-Leaderboard-Behavioral-Analysis/2001939
6. “Messaging Apps: Average Usage Time Around the World,” SimilarWeb blog; https://www.similarweb.com/blog/messaging-apps
7. “Number of social media users worldwide from 2010 to 2021 (in billions),” Statista; https://www.statista.com/statistics/278414/number-of-worldwide-social-network-users/
8. Why Payment Companies Are Flocking To Messaging Apps,” Fast Company; https://www.fastcompany.com/3068387/why-payment-companies-are-flocking-to-messaging-apps
9. “Why messaging apps are striking gold with peer-to-peer payments,” Mobile Marketer; https://www.mobilemarketer.com/ex/mobilemarketer/cms/news/messaging/21840.html
10. Ibid.
11. Why Payment Companies Are Flocking To Messaging Apps,” Fast Company; https://www.fastcompany.com/3068387/why-payment-companies-are-flocking-to-messaging-apps
12. “More social media apps have become payment apps — even Skype,” MarketWatch; https://www.marketwatch.com/story/why-companies-want-you-to-pay-for-stuff-everywhere-even-skype-2017-08-02
13. Why Payment Companies Are Flocking To Messaging Apps,” Fast Company; https://www.fastcompany.com/3068387/why-payment-companies-are-flocking-to-messaging-apps
14. “Digital peer-to-peer payments are the new norm,” Business Insider; http://www.businessinsider.com/digital-p2p-payments-are-the-new-norm-2017-8
15. “Messaging App Usage Worldwide: eMarketer's Updated Forecast, Leaderboard and Behavioral Analysis,” eMarketer; https://www.emarketer.com/Report/Messaging-App-Usage-Worldwide-eMarketers-Updated-Forecast-Leaderboard-Behavioral-Analysis/2001939
16. “The Cashless Society Has Arrived — Only It’s in China,” The Wall Street Journal; https://www.wsj.com/articles/chinas-mobile-payment-boom-changes-how-people-shop-borrow-even-panhandle-1515000570
17. Ibid.
18. “WhatsApp has launched person-to-person payments into beta in India,” TechCrunch; https://techcrunch.com/2018/02/08/whatsapp-has-launched-person-to-person-payments-into-beta-in-india/

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