Last June, Facebook hired former PayPal president David Marcus to run its Messenger division, leaving many people in the industry scratching their heads. “Why put a payments guy in charge of messaging?” stakeholders questioned.

But I felt this was just one strategic move designed to crystalize Facebook’s vision for monetizing its valuable assets.

This week, as the company revealed it was rolling out a payments feature in Messenger, it’s clear that Facebook is setting itself up to be a unique data store for marketing purposes.

There are three very important repercussions of this most recent announcement — two positive and one negative:

  1. The new payments feature helps Facebook become relevant to the new generation.
  2. It gives Facebook the ability to offer new value to marketers thanks to a rich store of payments data.
  3. It increases Facebook’s vulnerability, given that collecting large amounts of payments data makes the company even more ripe for exploitation than it’s been before.

Relevance for the new generation

Given that Facebook’s attachment rate with millennials has been less than stellar, it has pivoted from its “all in one social network” strategy in favor of break-out solutions. This essentially removes the bloat of the main application and allows the younger crowd to use Facebook assets in their own way – which is much more peer-to-peer and less “social network.”

About a year ago, the company introduced Facebook Messenger. Users were slowly forced out of the main app in favor of performing a few key functions independently. The Messenger app soon gained immense traction and remains one of the top downloads.

Then, Facebook began pondering a very loaded question: what else do millennials want to do with their peer connections? Their answer: exchanging payments.

New value for marketers

Facebook now has the chance to create an extra edge: By growing its peer-to-peer solution beyond just debit card support, it will have the ability to see “cash” movements of the underbanked on an aggregate basis and provide services like micro-lending, gifting, group purchasing, and casual merchandising. This bumps Facebook’s data harvesting value because it provides insight into cash transactions that have traditionally been untraceable.

While companies like Square and PayPal have been working in this area for some time, enabling transactions via Facebook reduces the friction associated with those transactions significantly, thereby increasing the opportunity for use. However, this tremendous value leads to a serious concern: vulnerability.

Increased breach threat

Security breaches are all too common. Rarely a day goes by without a major brand revealing they’ve been a target, causing major disruption and millions in recovery costs. You may recall one of the more notable attacks – “The Snappening” – when a Snapchat hack resulted in more than 90,000 personal photos and 9,000 videos being visible to the public. Facebook, now promoting a similar peer-to-peer concept (but with money), is already a big target and has been breached before.

As the network continues to add more payment services – and insists on keeping them all within its systems – the value of the breach becomes more and more significant. Already, the social networking giant processes more than one million transactions daily for game players and advertisers. Holding a large amount of personal, contextual, and payment data for individuals has a very unique value and keeping the hackers at bay must become a top priority.

Next steps for Facebook

Given Apple Pay, Google Wallet, MCX, Venmo and more – how does Facebook payments compete? Not by going directly into that same market battle, but by flanking the field and capturing the mindshare of the younger market through more useful and applicable tools to their style of life.

By focusing  less on big merchant credit card purchases and much more on peer community micro-exchange services, Facebook can then provide deep and dynamic insight into the purchase behaviors of that demographic for use by their merchant advertising community, to understand how best to reach back out to that same demographic through the Facebook marketing engine. The company has claimed over 1 billion users on its messaging platforms, Messenger and WhatsApp – and it’s growing quickly, adding 300 million people on Messenger less than seven months after launch. This gives Facebook tremendous reach.

By breaking Messenger into its own app, and adding peer-to-peer payments capability, Facebook is well positioned to react to and dominate the next hot wave that millennials embrace. There were doubters who felt that Facebook was no longer “young and hip” – even some who said it might fall the way of MySpace and other social networks of the past. Facebook’s recent moves may just prove those critics wrong.

Robert McCarthy is Tech Advisor at Mobiquity. You can follow him Twitter at @robertmccarthy.