In Singapore, bank customers will soon be able to transfer money using just their social media usernames in the first part of the following year.
This new innovation will allow 20 bank users to send money to their payees without entering any sort of code or account number. All they would need to do is link their public internet profiles like Facebook or Twitter with their bank accounts.
As banking apps have started to become more popular than traditional services, this initiative by banks seems to be their latest attempt of digitising their products to make them more relevant in this digital age.
The launch of online-only banking facilities that operate without any high street branches and biometric security methods like thumbprint passwords and services such as Paytm that give the customers the facility to transfer money using only the mobile number as well as standalone money transfer apps like Transferwise and Venmo may have triggered this pilot attempt.
However, this is definitely not a novel concept. In the U.S., Facebook users are already able to wire money to their friends through the site’s instant messaging service Messenger, free of charge. Snapchat users can also use 'Snapcash' to send money to their contacts.
In India, a similar payment program was launched by a bank that allowed account holders to transfer cash using their social media accounts like Whatsapp.
The scheme to link social media with banking services is part of a plan to build “a system for the future with capabilities to store multiple (proxy IDs)," an individual working on the project has reportedly told the Financial Times.
The successful twinning of the two could make it much easier to pay for services, split costs and generate business. “If you’re an entrepreneur, you can create a funding campaign using Facebook. The organisers of a school trip can use Facebook to see who’s paid”, Christophe Uzureau, a Hong Kong-based analyst at Gartner, told the FT. "An airline can use Facebook IDs rather than cash or vouchers to refund passengers for a delay. It’s more flexible and it lowers costs".
Security remains the only cause for concern due to the public nature and ease of discoverability of these social media platforms. Also, the user’s relatively lax attitude towards their passwords has given rise to cyber security attacks, as was recently seen when 117 million email combinations and passwords were stolen from LinkedIn.
It remains to be seen whether this relatively new experiment will reap positive results or not. For now, we can only wait and watch.