http://www.economist.com/news/finance-and-economics/21646802-facebook-enters-booming-market-mobile-payments-unfriending-cash
On March 17th, Facebook announced that in America its instant-messaging app will soon allow users to send each other money just as easily as texts and photos. All they need to do is link their debt cards to their Facebook account, tap on a dollar sign in the app, type in the amount, and press send.
Snapchat has also recently entered the market for free person-to-person (P2P) payments with a service called Snapcash. However, Facebook's service differs in the fact that it does not make instant payments. The money arrives after a few hours, or in some cases, even a few days. This is because money is not transferred between accounts managed by the social network but through conventional payment channels from one bank account to the other.
Facebook's new offering if proof that technology firms are moving onto banks' turf. Other examples include Apple's SmartWatch, Google's Softcard, and South Korea's Naver. If Facebook was to expand its offering internationally and make payment instant, the impact could be huge, especially because it would be able to overcome some of the logistical and regulatory challenges that banks face when serving customers across borders.
Do you think that technology firms and their payment apps will begin make banks more obsolete? What kind of impact do you foresee this technology having on an international scale?
4 comments:
I think FB Money, Snapcash will be very convenient mediums for people to transact money as a large number of people are active on these social media. These are concrete examples that the society is moving to e money.
However,this option of payments through social media could also lead to a higher rate of cyber hacking.
I agree with Erica, this goes to show that we are making bigger moves towards a cashless society. I do, however, feel that banks will continue to be necessary. They might not be used as much for these simple payments, but Facebook can't give out loans for colleges or mortgages for houses. It might make an impact on many banks, but overall they will continue to be necessary for society.
I believe these are huge breakthroughs in money transfers and make things convenient. I think that yes we are pushing more towards a cashless society. More and more outlets are going to strictly electronic transfers. Cash has become almost obselete. It is also more cost effective to do things this way
To me, given the current state of IT infrastructural security (horrendously poor), this proposition will likely fail when the first major security breach occurs. With HEARTBLEED among others compromising the critical SSL encryption methods, as well as recent breaches in TLS and RSA, convenience in transaction is here traded for information security at a precarious time and is just asking for black hats to compromise the services in question. Furthermore, the difficulty in finding near-universal adoption of any of these technologies will make their functional utility and use in the marketplace limited.
Post a Comment