Even though Apple Pay — one of the current industry leaders in mobile payment services for consumers — isn’t expected to account for more than 1% of all transactions during 2015, that bleak outlook on mobile pay plans didn’t stop Facebook from releasing its newest payment feature for its users. In fact, as TIME‘s Jacob Davidson recently reported, Facebook execs actually plan on losing money through the new mobile payment feature — and they aren’t bothered by it in the least.
Facebook’s new mobile payment feature was designed specifically for use in its Messenger App, which is a separate mobile app from the main Facebook app and which users are required to download in order to access private Facebook chat messages on mobile devices. The payment feature now allows Facebook users to send money to each other via digital transactions, through Facebook’s app platform, which are nearly as simple as sending a text message.
The concept of these mobile payment features isn’t new, and major social media and retail companies like Snapchat, Samsung, and Google have already joined Apple with offering similar mobile payment services for consumers.
As Fortune has noted, mobile payment services are (slowly) becoming more popular, but only among certain demographics (most notably millennials). But the convenience that these services offer to consumers isn’t really transferred into a profit for the company offering the service, causing many companies to hold back from offering mobile payment services, because fees can really only be enacted on a very small scale in order to convince consumers to use the service.
Thus, it’s likely that Facebook will lose more money from its newest mobile feature than it will gain. But as Davidson stated, making a profit isn’t really the point of these mobile payment features.
“So if [mobile] payments are a bad business,” Davidson remarked, “why does everyone want in? The answer is that mobile payments are essentially a value-add that can make other products more desirable. Apple Pay was never meant to generate money but to help sell more iPhones.”
Ultimately, Facebook hopes that its “friend-to-friend payments” (as Tech Crunch calls the service) will simply encourage more people to join the social media site and to use it more frequently. In the long run, Facebook execs anticipate that the long-term return on investment will be worth the initial loss — and by then, consumers might be relying on mobile devices for money transactions more than any other payment service.