In a decade, could Facebook tag our personal finances?
I had a Facebook notification this week, informing me I had been a member of the social media site for 10 years. That’s a lot of time spent liking friends’ cat photos, posting selfies and watching videos of recipes I will never make.
This got me thinking. How might I be using it 10 years from now?
I am prepared to bet that over the next decade, social media will become the platform through which we manage much of our personal finances.
Starting from this week, UK Facebook users can now link their debit card to Facebook’s Messenger app to make and receive payments to and from friends. I am aware that many privacy conscious readers will raise their hands in horror, but bear with me.
Register your card, set up a Pin, and you can exchange up to £2,500 in a message to a friend, with no fees. Adding emojis is optional.
The service was launched in the US in 2015. Friends there tell me it has become popular, as bank charges for transfers and ATM withdrawals are much higher Stateside.
Nevertheless, I think it will catch on here. Unlike online banking apps, you won’t need your friend’s sort code or account number to pay your way in bars and restaurants or, if you share a flat, to split utility bills and rent. Facebook birthday notifications could make it a popular way of sending a cash gift.
Facebook says banking data will be encrypted, and that the service will be offered as a “regulated payment service”, meaning it is subject to consumer protection requirements.
But it is one of a growing array of digital payment options. I am already a fan of the Pingit app; as a committed eBayer, I also have PayPal. While I haven’t bothered setting up Apple Pay, iMessage is soon expected to support payments.
Facebook won’t charge or make any money from the new service, which it views as a social utility. In the future, if the site’s billions of users feel as comfortable swapping money as they do selfies, why not go the whole hog and apply for a banking licence?
UK banks see the benefits of investing in whizzy mobile apps. TSB announced this week that customers with the new iPhone can use facial recognition technology to log in. But for those of us with app fatigue, doing our banking through an app we already have and use frequently could appeal.
Earlier this year, I planned a walking holiday in Ireland with a group of 12 friends using Facebook. We call ourselves Arse (the Amateur Rambling Society of England). Our Facebook group exchanged messages about when to go and shared links of where we might stay (in the end, we went for a converted convent — a bargain at only £20 a night).
As group treasurer, I booked it all. Then I had to get everyone to pay me back. PayPal, Pingit and online bank transfers were all used. It would have been so much easier to do this on the platform where everything else had been planned (and where the photos of 12 rather drunk middle-aged women drinking Guinness will inevitably be posted).
As well as now enabling this, Facebook is increasingly the platform where we discover businesses who want to sell us things. Every restaurant and takeaway joint worth its Himalayan salt now has its own Facebook page, and can be “tagged” in posts.
In the US, you can already use the site to find, order and pay for a takeaway to be delivered. Presumably when it turns up, you can post a picture of yourself eating it too (please don’t do this).
It’s not just food. My news feed is stuffed with advertisements prompting me to buy all manner of useless products (a very worrying indicator of what sort of person Facebook’s algorithms think you are).
I am apparently stupid enough to consider spending £70 on a pair of hipster slippers. My friend Peter — whose Facebook post about his wife stealing back her bicycle featured in my column a while back — is mildly offended that he keeps getting adverts for haemorrhoid cream.
But in the near future, we could be able to buy shares. In June, the UK broker AJ Bell completed what it said was the first share trade using Facebook messenger and soon hopes to roll this service out to its clients.
In time, could social media platforms be used to help us buy other financial products? After all, the most valuable thing they contain is our data — and the financial sector is itching to get its hands on it.
Many millennials have thin credit files, in other words, insufficient data such as utility bills and credit card statements that can be used to verify their identity or predict their creditworthiness. People who have just moved to the UK have the same problem.
Considering all the data they hold on us, within a decade I predict that they [social media sites] are going to be the ones selling the digital generation insurance policies, credit cards, loans, mortgages and even prompting us to top up our retirement funds
Social media would be an obvious way to fill this gap.
I loved the story about the chief executive of the US credit scorer FICO who said if you counted how many times a person said “wasted” in their profile, it had some value in predicting whether they were likely to repay their debts.
More recently, UK insurer Admiral said younger drivers could save up to £350 on their car insurance if they gave permission for it to analyse the language they used on Facebook. Overconfident boasting and use of exclamation marks apparently indicate you are more at risk of pranging your car.
A tempting discount, but the plan got the thumbs down from Facebook, who said the experiment would breach its privacy rules. It does not allow any third parties to use private data to assess eligibility for any reason.
There is clearly a risk that we will stop using social media sites if we feel that they are being hijacked by commercial interests. Yet considering all the data they hold on us, within a decade I predict that they are going to be the ones selling the digital generation insurance policies, credit cards, loans, mortgages and even prompting us to top up our retirement funds.