Tuesday, October 28, 2014

Why Facebook Suddenly Wants to Handle Your Money - TIME

http://time.com/3542410/facebook-money/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

Oct.,28, 2014  -  5:45 AM ET 
    
Mark Zuckerberg, chief executive officer of Facebook Inc., speaks during the Internet.org summit in New Delhi, India, on Thursday, Oct. 9, 2014.Udit Kulshrestha—Bloomberg/Getty Images

It's quickly becoming the biggest battle zone in tech


Facebook already handles your social life; now it wants to handle your money. Hacked screenshots released this month show a hidden payment option inside Facebook’s popular Messenger app, which is used by 200 million people around the globe. The feature—discovered by a Stanford computer science student snooping around existing code—would potentially let users send money to one another in a message using debit card information. Facebook hasn’t commented on the hack or when, if ever, it might activate the feature.
But, for the moment, a far more interesting question is why would Facebook consider going down this road at all. Behind Facebook’s foray into payments is a thrilling possibility. Could the world’s largest social network be gearing up for a future showdown with the world’s largest credit card companies? At stake is a potentially massive jackpot: the $40 billion to $50 billion a year (in the U.S. alone) that credit card-issuing banks make off the so-called interchange rate, i.e. the hefty transaction fee that merchants have to cough up whenever customers use credit cards.

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