Facebook ventures into online banking

First, it let you share photos and videos. Now it wants you to do your online banking through it, too.

 

If all goes according to plan, Facebook will soon let users not just upload their photos but also pay bills and transfer funds as well, CNN Money reported.

 

The report said Facebook is quietly planning such an online banking app with Australia's Commonwealth Bank, with the app in internal beta stage but expected to launch within the year.

 

Under the setup, Facebook users who are bank customers can make payments to third parties and to Facebook friends through the social media channel.

 

Commonwealth Bank will secure transactions with its own authentication system similar to how payments are secured on its online and mobile banking site, CNN quoted a spokesperson as saying.

 

On the other hand, David Robinson, Facebook's director of global marketing solutions, U.S. financial services, has suggested that Facebook hopes other financial institutions will follow.

 

"The hope is that by creating private experiences on social media's normally very public channel, banks can better engage customers, not to mention drive more traffic to Facebook, and open the doors to other avenues where the company can monetize its platform," the CNN Money report said.

 

Other banks

 

The report said other institutions may also allow financial transactions on Facebook: former Facebook chief privacy officer Chris Kelly is an advisor to Loyal3, a startup that lets Facebook users buy shares in companies they "like" and share that on the social network.

 

Facebook is also encouraging financial institutions to enable activities like banking, with full knowledge that they won't be shared.

 

Robinson said that with just 16 percent of a brand's fan base presently engaging with a company's Facebook page, there is a need to find other ways for users to interact with brands on Facebook.

 

Lookout for scams

 

Facebook is also taking care to look out against scams, such as spam messages where a friend may be in trouble and asks users to send money through their Facebook app.

 

But a spokesperson for Commonwealth Bank said the bank will not launch the app unless it can offer customers a 100-percent guarantee of security.

 

On the other hand, the report said Facebook is mum on other private services may potentially emerge, such as collecting paychecks, buying medical insurance or paying taxes.

 

"Facebook is a platform and a partnership company," it quoted the company as saying in a statement when asked if other financial institutions would be opening virtual branches on Facebook soon.

 

"We are supportive of brands and agencies, across industries, using the platform to better serve their customers," it said. — TJD, GMA News