We’ve been here before. A struggling company, defined by its messaging service, seeks to remain relevant by adopting the current popular trends.
That was BlackBerry back in August when it launched BBM Money, its P2P payments service within the messenger app that was powered by PayPal. Users in Canada, France and other European countries could send money securely with PayPal straight from their BBM app.
In December, the company expanded its money transfer services to its two strongest markets, Nigeria and South Africa, as well as Indonesia. The African continent is Blackberry’s biggest market, with the company saying it has over 22 million registered users there and 17,000 BBM installations every day.
Now in 2016, BlackBerry has chosen to focus yet another market as part of its mobile payments strategy: the United Kingdom. It has partnered with Barclays’ Pingit service to allow the users of the latter to use their BBM ID as a linked ID to send and receive money, and use Pingit within the BBM app on Android and IOS.
To P2P? that is the question
P2P mobile transfers is a growing market. In January alone, Venmo, the PayPal-owned digital wallet that allows users to make payments with friends, racked up over $1 billion worth of payments. That’s over two-and-half times what the company saw in January 2015, and more than 10x its volume in January 2014.
Pingit currently has over 2.9 million registered users, and more than 68,000 businesses have signed up to use the service. Since its inception in 2012 it has transferred over £2 billion.
“BBM has become a secure platform for consumers and brands to exchange messages, photos, files and stickers with each other,” said Matthew Talbot, SVP, BBM at BlackBerry. “Exchange money was a logical extension, whether it’s paying back someone during a BBM chat or buying something from a BBM Ad – and another great example of how BBM successfully brings chat, social and commerce together.”
“Customers want to be able to make payments quickly , easily and safely, and by creating the option for funds to be transferred from within BBM conversations, we’re allowing Pingit to make the payments process simpler for even more people,” said Darren Foulds, Managing Director for Pingit at Barclays.
Will it matter?
Blackberry firm saw its first revenue climb in nine quarters in its last earnings call as it continues to shift its business towards a more software-based operation. While its last results were better than expected the firm is still in fire fighting mode, letting go 200 employees in its Canadian and US offices earlier this move as it continues streamlining its business and trimming costs. That included the creator of BlackBerry Messenger, Gary Klassen. Like Apple and Google, Blackberry too wants a piece of the mobile payments pie and it’s trying to leverage one of its most popular products to do so. So where does its messaging platform fit into its plans?
Whilst a partnership with Pingit is certainly a positive step, one has to ask, will it really change that much? New users have no incentive to download BBM as Pingit can be used by anyone with a mobile number and a bank account and is already contained in a very stylish and clever app.
The firm is likely keen to mimic the success of services like WeChat in China, which not only incorporates money transfer services, but also Uber and Airbnb-style features to let customers pay for goods and services on their smartphone. WeChat recently opened the P2P transfers to overseas transactions meaning Chinese tourists can now use the messenger app to make purchases and pay bills when abroad. It also recently launched in South Africa, one of BBM’s strongholds.
Closer to home, the hugely popular messenger services Facebook Messenger and Whatsapp are waiting in the wings. While WhatsApp has made no moves in this space so far, its global reach make it a sleeping giant in the space. Meanwhile, Snapchat’s money-transfer service powered by Square is another player.
Its messenger service remains popular and it makes sense to cash in on the growing popularity of P2P money transfer, but the fragmentation of the market makes it a difficult space to compete in.
Mastercard is working with Stripe to expedite the payment process for American sellers on the latter's marketplaces using the instant payouts feature from Stripe.
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