The Article Summarized
Payment through messenger is already a huge trend in both the US and Asia. Now providers are attempting to penetrate the European market.
M-Pesa from Kenya and Alipay from China are the two forefathers of P2P-Payments. A complete payment process without a cumbersome transfer method, money is directly transferred from person to person - also known as “peer to peer”. Currently, the number one P2P-payment process is currently the Asian business WeChat. WeChat is a communication service that belongs to Tencent, a Chinese and internet communication service. WeChat and Alipay offer customers many possibilities, such as borrowing and lending money, purchasing financial products, transferring money to friends and paying bills. In 2015, WeChat already had 200 million users, while Alipay had 450 million.
The Western Market
In the western world, P2P-payment processes are not as popular as they are in Asia due to differences in how the internet is used, the data protection agreements and the competition. Facebook has optimized itself to win over the western world. Facebook users in the USA are offered the possibility to send money over Facebook Messenger by clicking a dollar sign in the chat. The chosen amount of money is then transferred to the recipient from the sender through a message.
Future Possibilities for Germany
In Germany, Lendstar and Cringle offers P2P-Payment processes. As they are not connected to established networks such as Facebook, their road to success is not easy. As Facebook is acquiring bank licenses for different EU countries, Facebook’s P2P-Payment service is also not far away. Snapchat will soon introduce Snapcash and Apple is not far behind with a patent for P2P-Payment. Even Whatsapp, the messenger service, is already emerging into the P2P market as a competitor in countries such as India.
Potential Hurdles
P2P-Payments offer users the possibility to pay through channels that they already use - therefore, payment is uncomplicated and easier to establish. Currently in Germany, security is a hot topic and causes potential obstacles for social messengers when they attempt to offer payment processes. The typical verification method of a fingerprint or a pin will probably not be practical for the European market, due to these security concerns and requirements.
