Facebook's big payments move

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Recode is correct: Facebook’s future is private messaging. In other words: Facebook wants to become WeChat, an “everything app” that can be leveraged to serve users multiple kinds of services. Businesses, governments, direct lines of contact, gaming and payments.

What are the implications?

The News Feed will fade away over time. It will still be around but not continuing to be the central Facebook experience. And the main money maker for Facebook. Besides Google AdWords, the News Feed is the most profitable digital advertising product. Wall Street will demand Facebook to replace decreasing News Feed revenues with new revenue streams.

 This new revenue stream will likely be commerce. Instagram is already working on a standalone shopping app, Facebook is developing a cryptocurrency and Zuckerberg was very explicit in his blog post, outlining his focus on “businesses, payments, commerce, and ultimately a platform for many other kinds of private services.”

Payments are becoming an integral part of social network feature sets. It makes sense for Facebook to try to become WeChat, simplify international payments, unify their offerings, bank the unbanked and continue to grow.

Will it work?

In short: no. Europe will use the sledgehammer and not allow Facebook to unify with Whatsapp and Instagram. They shouldn’t even bother launching payments in Europe. The US might deliver some revenue streams, but Facebook has been such a privacy and societal disaster, it is hard to believe that they will gain back the trust of their users to become the one app that rules them all.

It might work in some countries, where Facebook can bank the unbanked and where Facebook is basically the Internet. But those countries don’t generate enough revenue for the gas of the bankers Maserati’s.

 Never underestimate the desire for convenience when it comes to digital customers, but I don’t see this working on a scale that can help Facebook grow their user base and profit. It will make the payments world more complex, it will lead to a major push to break up Facebook and it looks like the beginning of a continued decline of the platform.