Juniper Research tipped Facebook and PayPal to lead a global expansion of so-called social payments, a sector it predicted would help drive growth in digital commerce over the next four years.

Its Digital Commerce Report 2018-2022 pointed to the strong potential of the social payments sector – which covers small peer-to-peer cash transfers made over channels also providing social or chat features. Use cases include splitting bills in restaurants and collecting money for joint purchases.

In the report, Juniper Research described the sector as a “key growth area” for digital commerce with expansion from existing providers and increased consumer adoption. It described Facebook and PayPal as in “pole position”.

The company predicted global digital commerce as a whole – comprising purchases and money transfers made online and through apps – would rise 60 per cent between 2018 and 2022, reaching $15 trillion per year by 2022.

Strong position
Brands acquired by PayPal are among the pioneers in social payments with Venmo – bought by the company alongside parent Braintree in 2013 – making significant progress in the US alongside international remittance arm Xoom. Although Xoom also is available in a few other markets, it is still largely US focused.

Facebook’s payment systems are only available in limited markets currently, however its WhatsApp subsidiary is set to launch in India imminently and Facebook has an electronic financial services licence for the whole of the European Economic Area – giving it room for huge expansion.

The space is proving to be a popular one in several markets with heated competition in India and the US especially, where social media companies and financial services providers are going head-to-head.

Elsewhere the likes of Safaricom are reportedly assessing a play in social payments while WeChat Pay, one of China’s two dominant mobile payments companies, has provided the service since its inception.