Sending money via Facebook’s chat app
New bot on Messenger facilitates transfers
Sending money to a friend or relative abroad just got a little easier for users of Facebook Messenger.
On Tuesday, London-based money transfer company TransferWise introduced a bot to facilitate money transfers via the social media giant’s messaging platform. For now, the service is available only to senders and recipients in the U.S., Canada, Australia and Europe, but the company plans to expand eventually to all the 50plus countries in which it operates.
The bot represents yet another way commerce has expanded on Facebook Messenger. Last March, the Menlo Park, Calif., company opened Messenger to all developers to create their own apps on top of Facebook chats. It already enables users to transfer money domestically, and it has worked with businesses such as auto retailer Edmunds.com to help them offer personalized customer service through bots — automated software that can hold conversations with human users.
Other popular messaging apps such as WeChat have also built platforms for payments, and people have the option of using stand-alone payment apps too.
TransferWise built the bot partly as a pilot for future platforms and partly to take advantage of Messenger’s reach, Scott Miller, head of global partnerships at TransferWise, said in an email.
“One billion people use Messenger, which means the accessibility and convenience alone are good enough reason, but it’s also about the technology,” Miller said. “The Messenger platform is the most advanced in terms of having an open platform that any company can build on.”
The bot works like this: You start a conversation in Messenger with TransferWise Bot and, if you want to send money, you are prompted to log in or sign up for a TransferWise account free of charge.
Then the bot asks which currencies you are using, and you must select a recipient from a list you set up with TransferWise. If you want to add a new recipient to your list — and whenever you are ready to make the actual financial transaction — you have to leave Messenger and go to TransferWise.
TransferWise charges a fee of 0.5% to 1.5% of the transaction. The company uses the real exchange rate (the midpoint between the buy and sell rates) in conversions.
Facebook doesn’t gain any direct revenue from the bot. But, said John Davis, vice president of the financial services firm Stifel, it is one more way for Facebook users to stay engaged with the social media titan.
“The more tentacles Facebook can get into you, the less likely you are to leave and the more likely you are to use it on a regular basis — which increases ad revenue and so on,” Davis said.
He was skeptical about how successful the bot would be at taking market share from other money transfer platforms and thought the user base probably would come instead from people making a spontaneous transfer, such as a person who wants to send a friend a birthday gift.
“If you’re sending money every month to Mom in Mexico, are you going to switch from using Western Union or MoneyGram to using Facebook?” Davis said. “People are creatures of habit.”
Mexico, along with China, India and the Philippines, is among the top destination countries for global remittances, according to the World Bank. Western Union and MoneyGram are two of the dominant players in the approximately $580-billion industry. Both companies have bricks-andmortar locations as well as the ability to handle payments online. They also serve many more countries than TransferWise.
Davis said moving money around the world is a much greater challenge than moving money domestically because transfers have to be vetted to ensure they are not facilitating money laundering, terrorism or other illicit activity.
“If all of a sudden terrorists start sending money to terrorist organizations in the Middle East using this app … that’s the worst nightmare,” he said.
It might be a nightmare for Facebook from a reputation standpoint, but the companies say TransferWise is the one responsible for legal compliance and the security of users’ financial data.