Facebook’s P2P Payments to Extend Beyond US Borders
Facebook’s P2P (peer-to-peer) mobile payment service is going global, and the first stop is the UK. British Facebook users will soon be able to send money to each other through the Messenger instant messaging platform. All they’ll need to do is link up their Messenger account with a debit card. This service has been available for free to Americans since 2015, and it is typically used there for sharing bills at social events and for transfers of less than $50.
The UK is particularly advanced when it comes to mobile payments in general, especially in the transportation and retail industries where contactless payments with Apple Pay and Android Pay are prevalent. However, it’s been slower to adopt P2P payments. Apple Pay Cash, Square Cash, and Venmo have not made it across the pond yet, so Facebook is a step ahead of its main competitors.
Money transfer industry analysts expect plenty of room for growth in the P2P market. Phil Sealy, principal analyst at ABI Research, believes that "there is significant opportunity for P2P to move beyond the social realms, possibly used as a future alternative platform to pay household bills."
- Read more about the best P2P mobile payment products.
FinCen Makes it Clear that Violations Won’t be Tolerated
FinCen, the US Department of the Treasury bureau that enforces anti-money laundering (AML) and anti-terrorism legislation, recently announced that it imposed a hefty fine on a private bank in Texas for insufficient vetting and monitoring of a Mexican correspondent banking relationship. Lone Star Bank must pay $2 million for allegedly intentional noncompliance with the Bank Secrecy Act, which allowed the Mexican bank to “move hundreds of millions of U.S. dollars in suspicious cash shipments through the U.S. financial system in less than two years.”
Correspondent bank accounts—in which a foreign bank establishes an account at a domestic bank—pose a high risk of money laundering, so US-regulated banks are expected to conduct strict due diligence on them, both upfront and on a periodic basis. FinCen stated that the fine “underscores the dangers that institutions face when taking on international correspondence activities without properly equipping themselves” to handle these heightened responsibilities.
- Learn how to keep your international money transfers safe.
Data Indicate Erosion of Trust in Financial Services
Brand consulting and design firm Landor analyzed the biggest database of consumer brand perception, the US BrandAsset Valuator, and determined which financial services brands are currently considered most trustworthy. PayPal came out on top, with 30 percent of consumers deeming it trustworthy. Credit card brands got the next highest rankings (25 percent for Visa, 23 percent for MasterCard, and 17 percent for American Express), while retail banks generally performed worse (17 percent for Capital One and Chase, 16 percent for Bank of America, and less than 15 percent for the lately discredited Wells Fargo).
Louis Sciullo, Landor’s executive director of financial and professional services explained these numbers: “We see credit card brands faring better because of their daily place in consumers’ lives and the relative clarity of their fee model. Meanwhile, PayPal’s high trust ranking stems from the amazing job it’s done to establish confidence in its digital platform.”
Landor’s analysis also shows that mobile payment platforms and digital currencies have a way to go before winning over most consumers. Just 13 percent of them trust Apple Pay and Google Wallet, and even less (10 percent) trust Venmo, even though it’s owned by PayPal Holdings Inc. Bitcoin is pulling up the rear with just 6 percent of consumers calling it trustworthy.
When compared with data from the past decade, this year’s data show a loss of trust in the financial sector overall. “Consumers are increasingly wary of institutions serving motives other than customers’ best interests,” stated Maarten Lagae, Landor’s senior manager of insights and analytics. “This is even more true with millennials, who are the first to engage with businesses that provide transparency and disrupt unequal power relationships.”
- Want to find an international money transfer provider you can trust? Use our foreign exchange comparison tool.
