Apple Pay has been making inroads in the traditional payments landscape, but now it could grab a “bite” elsewhere. During a call last week to discuss his company’s quarterly earnings for the last quarter of 2015, Facebook CEO Mark Zuckerberg said the social media giant is open to working with any entity in the payments business.
Addressing analysts and others on the call, Zuckerberg admittedly reaffirmed earlier assertions that Facebook does not want to “field a bespoke payment product.” He also noted that he does not view the company as a “payments business.” However, he did express an interest in partnering “with everyone who does payment,” citing Apple Pay as a specific example. Zuckerberg told call participants that Facebook management perceives “the stuff that Apple is doing with Apple Pay… as a really neat innovation in the space that takes a lot of friction out of transactions.”
Not surprisingly, Zuckerberg deemed low-friction transactions, such as those processed via Apple Pay, translatable into higher traffic. That traffic, he said, is a key quantifiable metric in the business of selling online space—an endeavor in which Facebook is heavily vested. The reason the latter is so? The social network wants a system that makes it easy for users to interact with businesses, which in turn would allow it to charge more for ad space.
Facebook has already made a move into e-commerce, so teaming up with Apple Pay doesn’t seem to us as if it would be a “reach” for the social media network. Users currently have access to a variety of currently of current offers, which Facebook has designated as “tests.” For example, Facebook now features integrated “buy” buttons on business pages. It also touts a shopping section, designed to keep users engaged online and within the mobile Facebook app. Peer-to-peer money transfer, another app-based feature, was introduced in Messenger in 2015.
“On payments, the basic strategy that we have is…to take all the friction out of making the transactions that you need,” Zuckerberg stated on the call. He said this is “especially” true of Facebook products like Messenger, “where the business interaction may be a bit more transactional.”
While Zuckerberg neither revealed any further information about an alliance between Facebook and Apple, nor discussed teaming up with any other specific payments player during the call, this much is clear to us: Allying with the social network can be seen as a potential victory for Apple, despite the fact that it is unlikely to result in the generation of significant revenue. That victory, we believe, will come in the form of online exposure for Apple Pay’s in-app payment feature, which is rarely seen in ads.
Stranger partnerships have been formed. So while we still don’t see Apple Pay as a be-all and end-all, a partnership with Facebook wouldn’t be a bad thing at all.