Some would argue that it already is in some locations with Snapchat, Facebook and WeChat embracing payment services.
Our mobile phones have increasingly become a major part in our banking processes with apps, transfers and cardless cash options. And paying with your mobile has never been easier too with the growing success of providers like MPesa, as well as the roll-out of Apple Pay. But what happens when you bring social media into this transaction mix?
According to Juniper Research, social could bring mobile money transfers to an entire new level, noting that they are expected to increase by ‘nearly 150% in 2015 to more than 13-billion’. This increase will come about largely as a result of the US social payment service Venmo, now owned by PayPal, which is currently seeing traffic worth an estimated $1 billion (US) a quarter. This app started as a text message based means of paying friends, and has adapted to focus on the social element of payments, which has been largely adopted by students and young professionals.
Social platforms have been looking at ways to integrate payment options to keep users on their platforms, whether it’s by teaming up with existing payment providers like Snapchat have done with Square, or powering their own technology like Facebook Messenger have just rolled-out in the US.
The Chinese market has already seen some great success with Person to Person (P2P) payments, with WeChat and Alipay seeing significant traffic increases as a result of a P2P gifting activity where ‘WeChat users engaged in more than 3.3 billion P2P transactions in just six days over the Chinese New Year period.’
One question that immediately comes to mind on the payment through social strategy is if there is enough trust in a social platform to link it with all your banking and card details, and use it to pay your friends, and possibly to pay for commercial transactions also in the not too distant future? Could this trust issue just be a result of the age factor too? Venmo is largely adopted by millennials, so will they progress to having their banking details across all their social networks with ease of payment taking priority over privacy? Or does that age group just have more trust and/ or knowledge about the social platforms that they embrace during their day-to-day lives?
These predictions also suggest that banking apps could get left behind, unless they too adapt the social element to their mobile payment processes. But, as we see too often in the financial sector, these innovative integrations often get overlooked and ignored.
It’ll be interesting to watch the role social media has in the growing mobile payment area, and also in pairing e-commerce with social commerce, making it even easier than ever before for a consumer to buy online.