June 28, 2012

Facebook Payment Services and Banking: Coming Soon?

These days, brick and mortar businesses displaying some kind of signage saying "Like us on Facebook," are nearly as common as those displaying Visa and MasterCard logos. That's worth considering, when you think about using Facebook as a way to pay for goods and services in the physical world.

Of course, Facebook users have developed some trust issues with the site over the years. It would be quite interesting to see if a PayPal-like service from Facebook would be widely adopted. It's one thing to trust a third party with your status updates and photos. It's another to trust them with your money.

Last week, Facebook announced that it is getting rid of Facebook Credits, in favor of real money. Users will start paying for virtual goods using their native currencies. This represents the beginning of users being able to treat their Facebook account like a bank account, or at least like a PayPal account. I'm not sure if Facebook is FDIC insured.

Facebook has not mentioned anything about using currency to pay for things in the physical world but one can simply connect the dots. For one, Facebook has over 900 million users. Many of them carry it around in their pocket all day long. Now, consider that Facebook recently acquired Tagtile, described as "your universal loyalty card," for which you can "visit local stores, tag the Tagtile Cube with your phone, and get rewarded for being an awesome customer."

If Facebook is going to offer a digital loyalty card to use at stores, and Facebook is going to have user account balances based on actual money, it seems only logical that users will simply be able to pay with their Facebook accounts, as long as businesses adopt the technology.

Think about how the Facebook sign-in option already works for many sites in the web (and especially from mobile devices). It is so much more convenient to simply tap the button to sign in with Facebook than having to enter a whole other account name or email address and password. Paying this way could save a lot of time and hassle.

This already exists:

The Trust Factor
Privacy issues have been rampant with the the social network's dealings for years, yet everyone still uses Facebook. Last year, as the result of a settlement with the Federal Trade Commission, regarding privacy, Facebook had to agree to regular third-party audits to make sure it remains in compliance. This all came after Facebook was found to have not kept its promises, by not warning users of privacy changes or getting their approval in advance.

Just this week, the company switched default email addresses of users to Facebook email addresses without warning. This isn’t exactly a privacy issue, but it’s another change being made to users’ personal accounts for them. Things like this tend to irk users, and don’t do much to make users more comfortable with how the company is handling their accounts.

Do you want to keep so much personal information, photos, videos, and money all under one Internet-based account? There are major hacking stories in the news frequently these days, and many may be hesitant based on that very fact

 Would you trust Facebook with your money?

By Chris Crum
Curated by Limewit Blog

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