Author: Aaron Levy
The rise of social media peer-to-peer payment services
Much has been documented about the rise of digital-only banks entering in to the financial sector over recent months. With the first of them set to launch this year, is there room for a social media platform to disturb the peace even further?
In March, Facebook launched their Peer-to-Peer Payments service. This allows users to link their debit card to their account in order to pass money through messaging. The Messenger app now includes a small “$” icon above the keyboard which opens a payments screen where users can type the amount they wish to send. This form of peer-to-peer payments via social media has got me wondering, could there be more than just payments at the end of this story?
Potential for financial global domination
HSBC currently has around 60million customers globally in 80 different countries. However in comparison to the largest social media platform, Facebook currently has around 1.19billion active users per month. If Facebook was to apply and be issued with banking licenses, they could have the potential to become the world’s largest bank overnight.
Smartphones, tablets and the Facebook Bank
Research by the British Banking Association (BBA) suggests that banking by smartphone & tablet has become the leading way for customers to manage their finances. The same can be said for the use of social media platforms, with the majority of users of major social media platforms using their mobile devices to access their accounts according to Mashable. A Facebook Bank would tick all the boxes in terms of digital, an account that allows you to be social as well as handle your regular banking. Facilities such as transferring money, setting up direct debits and standing orders, savings and of course have your monthly salary credited. That niggling problem of transferring money overseas, suddenly becomes light work. Facebook Bank could make the world’s banking network smaller.
The possibilities of banking on social media platforms
Facebook Bank could offer you the ability to create a group of friends who are trying to save for a holiday to Marbella in July. The friends could share their savings amongst a selected group or create a team kitty that everyone adds money to. Another feature could be, you are able make purchases straight from your account using Facebook. Companies could then use the platform to sell and market their products directly to the consumer, without them ever having to leave their social media profile or enter payment details on numerous websites.
You could also set a venue spending limit on your debit card, when you ‘share your location’, update your status or even make your first purchase, Facebook Bank knows where you are, and stops you from overspending at a particular venue using the agreed limits you set.
Would Facebook be trusted with sensitive bank data?
Users are already posting numerous photos of their most intimate moments on social media, as well as frequent status updates and location updates. It seems that people already trust Facebook with their data, making payments on the platform is just another feature, a bank would be just a natural progression.