In many nations, the change from cash to digital payments has occurred over the previous ten years. Many governments and merchants aggressively opposed the use of cash during the coronavirus epidemic; if another form of digital payment, ideally contactless, could be used instead, the transition away from cash has accelerated.
Increased adoption of digital payments has been aided in many markets by a rise in the number of digital payment methods available. These include peer-to-peer payment technologies for moving money between people, some of which can be used as social payments through social media platforms.
Volumes and transaction values of such social payments are increasing, in part due to the increased usage of social media. According to Datareportal, 3.96 billion people – over half the world’s population – were active users of social media by July 2020.
The numbers are staggering: Facebook had 2.6 billion members in July 2020, WhatsApp had 2 billion, Facebook Messenger had 1.3 billion, and Instagram had slightly over 1 billion. Several additional services, such as Twitter, Tiktok, and Sina Weibo, are used by hundreds of millions of individuals. The great majority of social media users (about 4.33 billion) use these networks via smartphones.
It’s unsurprising, then, that fintech companies, banks, and social media platforms have all built peer-to-peer social payment technologies. If these services are to flourish, they must provide both convenience and security, but there is huge potential for additional expansion in the use of these services in societies where smartphone use and digital payments have become the standard.
What are the Benefits of Using Social Media for Money transfer?
Money transfer is a private matter. Whether you’re cashing a check to pay your bills or sending money to a relative in another country, the transaction is personal. Most regular money transferrers are used to an in-person model in which they physically present a check to someone at their local money service firm. They then gather their funds while waiting for the check to clear.
This often associated with a store, and incentives are offered to encourage the individual cashing the check to stay on the premises and spend their money at the related store. The entire family will turn the task into an errand and spend time together at their local hangout.
A note is frequently sent between parties when migrants send remittances to relatives and friends back in their home country. The sender could include some international news or a conversational tip for the recipient. The social factor is a common thread that runs across all types of money transfers.
Sending and receiving money, as well as cashing a check, require some human interaction. The yearning for a social and personal touch remains while technology pulls us forward towards a world where software and apps replace humans.
Some Collaboration of Payments and Social Media
Facebook launched a peer-to-peer money transfer feature in the United States earlier this year in an attempt to get into the mobile money transfer business. While users will not be charged for transactions, others see this as a solely data-driven initiative that would allow Facebook to provide advertisers with particular financial information for advanced targeting capabilities.
The success of Facebook’s project is still up in the air, but if their international presence and ability to form deep connections are any indication, they will go far. Snapchat, the occasionally contentious video and photo-sharing service, teamed up with Square to develop Snapcash.
Many questioned Snapchat’s future sustainability when it turned down a Facebook takeover, but the business is now preparing to enter the congested peer-to-peer money transfer industry. With their new Google Wallet, which is geared at competing with Square and Venmo, search engine titan and cum technology pioneer Google is attempting to make money socially.
Some Remittances and Social Media
The new feature, which is an industry first, connects senders and receivers through their Facebook friend list, allowing them to exchange information instantly and linking them to the Azimo app to execute a transfer, all with a few simple clicks. With social networks connecting billions of people around the world, the integration takes advantage of Facebook’s widespread use and ease of use, resulting in a more efficient and user-friendly service.
The solution offers a smooth two-way interaction in which the recipient can choose from over 270,000 collecting places across the world or enter their bank details immediately within the app. This feature tackles two key customer complaints: the possibility of mistyping payment information and delays in receiving information, both of which slow down the overall transfer process.
Azimo’s strong Facebook integration, mobile-first approach, and product innovation are all designed to fulfill the needs of today’s “always on” client, no matter where they are in the world.
The Mobile Money Market and Social Media
Social media’s impact in the mobile money sector cannot be emphasized. By its very nature, the sharing and caring culture of social media platforms is becoming increasingly mobile.
In fact, social media money transfers are expected to push mobile money transactions above 13 billion this year, putting the total number of transactions on course to climb by 150 percent in 2015. (Money Market United Kingdom)
More transactions are taking place than ever before as the money transfer sector adjusts to mobile technology. Remittances are worth twice as much as foreign aid on a global scale, highlighting the importance of personal and social transactions.
Social Money Transfer in the Future
What will the crowded mobile money market look like? The survival of the fittest turns out to be the survival of the most social.
Businesses and apps who stay up with mobile technology and fully commit to early social platform adaptation will win out. As people become increasingly accustomed to the convenience of mobile money, they will seek out platforms that allow them to connect in meaningful and intuitive ways.
The growth of this method of payment is part of a larger shift in how people pay for things. These developments will have a huge financial and economic impact, as well as raise critical questions about how consumers and businesses interact with social media and the data collected as a result of those interactions.
Businesses that enable their usage, as well as their consumers, investors, and the economy of nations where these services are made available, would all gain if appropriate precautions are taken to ensure that their use is safe. Businesses and other organizations would be advised to keep a watch on the succeeding development phases if they haven’t already done so.