After grappling and testing the WhatsApp mobile payments feature, Facebook is planning to expand it further starting from London. The social network chose London as the hub for this activity as the city attracts talent from across multiple cultures and countries where WhatsApp is extremely popular.
Currently, WhatsApp has 1.5 billion active users across the globe but the company has only 400 employees most of whom are based out of California. Last year, WhatsApp sent engineers to the UK to scout and recruit talent. Close to 100 people were hired in London and Dublin to help with the development of WhatsApp mobile payments.
The expansion of WhatsApp’s in London is a clear indication that Facebook is following through on its plan to monetize the messaging app with WhatsApp mobile payments feature as a part of unifying its messaging platforms. The WhatsApp mobile payments will launch in many countries this year. After an initial test in India, the feature would expand to countries like India, Brazil, Indonesia and Mexico where WhatsApp is wildly popular.
“Payments is one of the areas where we have an opportunity to make it a lot easier. I believe it should be as easy to send money to someone as it is to send a photo,” Zuckerberg said at the conference.
Payments are an important way for Facebook to diversify its revenues and lessen its reliance on digital advertising whose growth has plateaued in recent years. While social media ad revenue expanded 31% to $28.9 billion last year, that rate is much less than the 47% compound annual growth rate from 2012 to 2018, according to the Internet Advertising Bureau. The mobile payments market is forecast to grow more than 33% a year to $457.4 billion in 2026, per IT Intelligence Markets, making it a potentially lucrative business for the social network as it seeks to diversify its revenue streams.
Facebook has announced in a blog post that from June 5, it will no longer support ads for Contracts for Differences (CFDs: complex financial derivatives allowing traders to speculate on the price movements of the market). This is in keeping with a crackdown on ads for financial services showcasing predatory behaviour. Doing this allows Facebook to get ahead of many complaints and lawsuits that arose due to discriminatory ad targeting practices.