Facebook’s potential in financial services has been a recurring topic on my blog for the last couple of years. With this month’s announcement that Facebook has approached leading US banks with a request to access transaction data, another piece of the puzzle falls into place.
Early December, Facebook finally unveiled their newly acquired licenses for e-money and payment services out of Ireland. The rumors of Facebook entering the payment space in Europe has been going on for a while, ever since it was reported that Facebook applied for a money transfer license a while ago. Facebook is already in a unique position to disintermediate retail banks as the most powerful digital ecosystem out there for consumers. The key to Facebooks powerful position is the ability to evolve alongside changing user behavior, and so far, Facebook is excelling at this. According to a study conducted by pwc, 68 percent of bankers are concerned with losing control over their customer interface. A regulatory compliant Facebook should definitely make those concerns turn into worries.
Before you say that Facebook is no longer perceived as cool with today’s youth, do you know what is even less cool? Banks.
When you break down the numbers, coolness becomes less relevant. When it comes to user engagement, Facebook’s reigns supreme above all others. WhatsApp has exceeded 1 billion users, and Facebook Messenger reports 900 million users, handling 60 billion messages a day combined — three times the number of traditional text messages. The combination of chat and payments have already proven to be a great success, as exemplified by the launch of Facebook Pay, Snapcash by Snapchat, WeChats integrated payment solution and Kakao Pay in Kakao Talk in South Korea.
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