The cozy and consolidated universe of payment and digital wallet providers got a little less comfortable on Wednesday (July 14) after social media giant Facebook announced plans to expand its offering in a move that will tighten up the competition within this lucrative sector.
In announcing that Facebook Pay would, for the first time, be available to other merchants outside of its own platform, the California-based company founded by billionaire Mark Zuckerberg is making its largest expansion yet into facilitating monetary transactions — at a deeply discounted rate compared to rival offerings from Apple, Google and PayPal.
Facebook’s latest two-pronged attack to gain digital wallet market share consists of a 0 percent revenue sharing structure until 2023, as well as the pitch to get outside merchants to offer Facebook Pay as an option starting with Shopify vendors next month.
“Starting this August, businesses in the U.S. who use participating platforms will have the ability to enable Facebook Pay as a payment option directly on their websites, giving their customers the ability to speed through checkout without having to re-enter their payment information,” the company said, noting its intentions to expand the service to more platforms and payment service providers over time.
Last month, Zuckerberg hinted at his intentions to grow Facebook Pay via a post that teased an upcoming revenue share agreement that would be “less than the 30 percent that Apple and others take.”
The discounted payment platform was also touted as a way to “help more creators make a living on our platforms” by keeping paid online events, fan subscriptions, badges and upcoming independent news products free for creators until 2023.
While Facebook Pay is still only used by a small fraction of the consumers who currently buy goods and services in-store and online with Apple Pay or Google Pay, the social media giant hopes to use its formidable base of 2.8 billion monthly active users to grow its newest revenue stream.