Who knew? Facebook has a mall called Payvment with 60,000 retailers and is adding 400 a day, I learned from Chris Skinner at The Finanser.
Put together an online mall and a credit system such as Zynga, and
you could wind up with a retail powerhouse running its own payment
system, leaving banks to supply the payment utility but not much else.
Chris who writes about banking and runs the Financial Services Club
in London and other cities in Europe, is an is enthusiastic, if often
optimistic, early spotter of trends. He notes that Facebook requires
its credits be used for social games, like Zynga — Facebook takes a 30
percent cut of the credits. Chris figures the social gaming earns
Facebook about $1 billion a year…that’s just games, not any e-commerce,
yet.
“If Facebook gets its act together for using Credits for Commerce,
then they could be bigger than PayPal and Google. This is because, by
2020, Facebook – or it could be Google Circles or something else – will be the internet.
“People will go there first and stay there, visiting all of the
destinations these ecosystems offer and trading with them in their
currencies.
“These social sites will house millions or even billions of people in
a social ecosystem that embraces music, relationships, ideas,
creativity, business … life basically.
“And where there’s life, there’s commerce.”
Take a look at his story for how this can play out for banks…not very well. Can you spell plumbing?
Chris says Facebook could offer 1 Facebook Credit as a bonus for every $10 spent with retailers on its mall.
Maybe, but this has been a long-time threat that doesn’t seem to have
happened so far in mixed banking-commerce partnerships. Some years ago,
after flying back to New York on Virgin and having spent time shopping
at Tesco, I speculated at the great competitive advantage that a company
offering consumer goods and banking services might have. After all, a
bank can offer customers money (whatever happened to toasters?) in the
form of discounts on loans or higher interest rates to reward multiple
accounts. But really, is the difference between .25 percent rate on
savings and .75 percent compelling? But if you are Virgin and can throw a
$100 discount on a transatlantic seat that would otherwise be empty,
you have a powerful incentive for customers and help fill planes without
paying outside consolidators.