In a recent blog post, PayPal Holdings executives announced that they will be integrating a bit more with social media giant Facebook. Although users of Facebook could already use PayPal for services like paying for an Uber ride, now users of Facebook’s Messenger app will be able to pay various merchants on their online shops directly.
Facebook executives greeted this further partnership with excitement. They said they will welcome further integration with various payment services in the future.
Analysts believe that putting payments into social messaging may be the future for American transactions. Actually, the USA lags behind China in this regard. Many Chinese currently use chats or posts to directly exchange payments. With an average of one billion messages sent per month on the Messenger app, it certainly behooves PayPal to get involved with Facebook early on before the USA moves increasingly towards paying through messages.
Many people in the payment space have feared that tech companies might destabilize older businesses with new payment technologies and apps. However, this latest deal with PayPal shows that it might be more plausible for tech companies to make deals with those already established in the payment space.
PayPal representatives said that they believe tech companies will increasingly look to professional payment companies to integrate with since, as they put it, payment transactions are very difficult to handle nowadays. PayPal thinks that financial service companies should have no worries of Apple, Google, or Facebook taking over, since these tech companies really need the financial expertise only professional payment processing companies possess.
PayPal’s grand plan with this deal is to further drive their volume against competitors. PayPal also currently owns Venmo, another popular payment app that has transferred some $20 billion this year alone.
PayPal has been aggressive in forming alliances with Chinese giant Alibaba as well as the social media site Pinterest in recent months. PayPal hopes to make a strong foothold in these markets to be thede factoe-payment method for millennials.
Executives at PayPal have even been getting closer with Apple executives in recent years. Of course, Apple currently offers an Apple Pay service that competes with PayPal, but PayPal now owns Braintree payments software that allows merchants to use Apple Pay. Also, Apple allows Venmo to be used via their Apple iMessage service. People can even ask Siri, the voice-recognition software on Apple’s iPhone, to send money to a relative or friend via Venmo.
All of these deals make it clear that PayPal wants to dominate the 21st century’s digital wallet, especially on social media sites. PayPal’s stock (ticker PYPL) is currently trading around $43.