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What Facebook Pay could mean for the future of content payments

mobile phone and two dollar bills

Facebook Pay has the opportunity to help overcome the hurdles micropayments have faced in the West to enable new lines of revenue for the industry. But can publishers ever trust them enough to make it work?

Earlier this week, Facebook announced its new payment service, Facebook Pay. Aimed at providing people with a ‘convenient, secure and consistent payment experience,’ the service will be enabled across Facebook, Messenger, Instagram and WhatsApp.

If this seems out of the blue, that’s because it is. Some have suggested that the timing of the launch implies it’s a backup plan after its plans for a global currency, Libra, hit major roadblocks. 

But Facebook has actually been testing a payment system for WhatsApp in India for over 18 months, and has processed more than $2 billion in donations through its fundraising tools, which launched in 2015. Given the success of competitor products like Apple Pay and Amazon Pay, it makes sense for the tech giant to broaden its ownership of financial transactions.

It’s a step that will almost certainly present publishers with a number of opportunities and challenges over the next few years.

What this means for publishing

Firstly, a disclaimer. Facebook haven’t yet said anything about allowing this system to pay for articles or content in any shape. Facebook Pay is rolling out in the US this week, and will initially focus on in-game purchases, fundraisers, event tickets and person-to-person payments on Messenger. 

Selected Pages and businesses on Facebook Marketplace will also be able to use the functionality, although this is likely to be focused on products rather than services or content in the short term. Rollouts on Instagram and WhatsApp will follow, although there’s no set timings.

Facebook Pay in practice, via Facebook

Secondly, I (along with most of the publishing industry) have big misgivings about Facebook being the instigators of this. They have made it quite clear on a number of occasions that they don’t care about publishers, and it’s likely there’ll be some public resistance too. After all, if Facebook can’t be trusted with personal data, why should they be trusted with financial data?

But in order for seamless universal payments across services, subscriptions, products and content to work, our options in the West were always going to be limited to a platform with global reach. Which unfortunately leaves just Google, and Facebook’s respective platforms.

Facebook is acutely aware of the revenue struggles publishers have faced, even going as far as to pay (some) publishers to appear in their newly-launched News tab. That transaction isn’t sustainable for either side, and it would be a logical next step for the tech giant to use Facebook Pay to offload the responsibility for payment to the consumer.

Given the limited number of publishers who will use Facebook’s subscription tools, it’s highly likely that CEO Mark Zuckerberg will use Facebook Pay as a way of enabling micropayments for content.

Hear me out.

Facebook Pay paving the way?

The primary hurdle for micropayments has been friction in payment. No, it’s not the willingness of people to donate – you only have to spend a few minutes on Twitch or WeChat to see how happy people are to ‘tip’ creators of content they enjoy; Twitch generated over $12 million in 10 months from its ‘Cheers’. 

On WeChat, readers can ‘tip’ article creators a small amount of money with one click, thanks to the platform being the world’s most popular mobile payment system. According to CJR, one writer receives on average $602 per article. The platform is also rolling out a ‘pay to read’ function to gate content.

The main obstacle is the faff factor in logging in and entering card details for the sake of giving over a small amount of money.

For micropayments to work in the West, this was always going to go one of two ways. Either one of the many micropayment vendors would get enough publishers on board to reach a critical mass where enough people had joined, or one of the tech giants would implement a system that would allow quick and painless financial transactions.

This could have been Google. Many people already have card details saved with the browser, and it wouldn’t have been beyond the realms of possibility to work with publishers on an easy tipping or donation system from Chrome.

But Facebook have got there first with a platform-based payment system. In a way, the timing makes sense, given the strides they’ve made with Facebook subscriptions and the recent launch of the News tab.

So how could this look in practice, bearing in mind that this is still very early stages for Facebook Pay? It’s plausible that registered publisher pages would be able to apply to enable tipping. Any content they publish in the News tab would then have a call-to-action of some form, offering the option for readers to donate money.

Perhaps Facebook would take a cut. Perhaps articles would open within a window with easy-to-use donation tools. Or perhaps such an option would only be available to publishers on Instant Articles, giving the platform some vital leverage to reinvigorate the format.

It’s also a possibility that this sort of tool is very low down Facebook’s agenda. Rolling out Facebook Pay across their complex portfolio will occupy them for a while, not to mention the legislative challenges of bringing this to other countries. 

But it’s inevitable, given their recent willingness to listen and work with publishers again, that Facebook will be thinking seriously at some stage about how this could be used to keep the media industry happy.

Publishers need to start thinking about their approach to this, because it’s no longer a question of if Facebook will enable payment for content, but when.