Would You Do Your Banking On Facebook?By: Chris Crum - July 14, 2012
Can you imagine a world where all of your financial transactions are going through the same account as all of your photos, status updates, videos, game playing, and music discovery? Facebook certainly can, and that looks to be the goal the company is trying to achieve. It’s been obvious for a while that Facebook will make a major push in payments, but it doesn’t end there. Facebook is reportedly looking to get into the banking business.
Would you ever do your banking with your Facebook account? Let us know in the comments.
According to a report from CNN Money, the company has been talking to banks about offering solutions that would allow bank customers to do their banking and engage with their banks using their Facebook accounts. Lauren Barack reports:
“There are certain things, whether itʼs financial services, or banking where I donʼt necessarily want my friends to know exactly what Iʼm doing, right?” David Robinson, Facebook’s director of global marketing solutions, U.S. financial services, asked a crowded room of bankers at a Securities Industries and Financial Markets Association (SIFMA) seminar in New York late last month. “I want to be able to go in and have an experience with my advisor or my bank and have that be a one-on-one experience.”
Facebook is quietly planning just such an offering with Australia’s Commonwealth Bank. Currently in an internal beta, with the first version built in March, the application is expected to launch sometime this year to customers. It will allow Facebook users who are bank customers to make payments to third parties as well as Facebook friends through the social media channel, according to the bank. Commonwealth will secure transactions with its own authentication system — similar to how payments are secured on its online and mobile banking site, a spokesperson says.
Even without bank partnerships, Facebook is already looking to provide some banking-type services of its own. Much like PayPal, Facebook users can keep real money in their accounts. It seems like only a matter of time until it becomes an accepted form of payment at businesses around the world.
Last month, the company made a very significant announcement, when it revealed that it would ditch Facebook Credits (historically used to pay for virtual goods within Facebook app) in favor of real, native currencies (Dollars, Pounds, Yen, etc.).
The company didn’t reveal any specific plans to offer payments for goods and services in the physical world, but the move clearly puts Facebook in a position to compete more directly with PayPal (which you can use to pay at places like Starbucks, by the way).
Over 900 million people have Facebook accounts, which are easily accessible via mobile phones, in users’ pockets at most times of the day. If Facebook can convince users to keep their money tied to their Facebook accounts, the company could have a tremendous advantage in the payments space, particularly since users are already spending so much time interacting with content with those accounts.
Facebook obviously has a major hurdle to climb before the majority of users start putting their money into their Facebook accounts, or doing any banking with them. The company doesn’t exactly have the greatest reputation when it comes to user privacy, and that’s a major problem when you’re talking about money.
It’s one thing put your status updates on the site, upload some photos, and share what music you’re listening to on Spotify. It’s another to trust the creators of “frictionless sharing” with your finances and associated information.
At least Robinson made a point to mention that there are things (like banking) he doesn’t want his friends to know about. It sounds like Facebook would at least offer the appearance of a privacy net around any banking endeavors, but getting users to put that much trust into the company who had to be regulated by the FTC for privacy-related issues, may be no easy task.
Of course, the same thing could be said of a major competitor.
Do you trust Facebook enough to keep your money in your Facebook account? Would you ever consider banking with Facebook? Let us know in the comments.