Facebook seems to be looking at yet another avenue — social banking — to generate additional revenue. It is apparently working to enable users to access banking features like paying bills, transfer money and access checkbooks through its platform.
By integrating standard banking features within its offering and tying up with banks and other financial institutions, Facebook could not only become a more intimate part of its users’ lives thus boosting engagement on the platform, but also generate additional revenue eventually.
Facebook is working with Australia’s Commonwealth Bank for an initial rollout, and will soon enable its customers to make payments to their friends and contacts and also offer a more social experience.
Though there might be some privacy and security issues which would need to be ironed out, social banking could be a huge hit and become one of Facebook’s major revenue engines. Facebook could take a cut off each fund transfer or each bill payment as a convenience charge.
Given its massive user base of more than 900 million monthly active users, even if a small fraction start transacting regularly, it could mean a significant source of cash for Facebook, which currently relies primarily on socially targeted advertising to make money.