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Facebook: the latest way to transfer cash
W
ould you trust a social media website
such as Facebook or an app such as
Snapchat with your money? In America,
thousands of people already do.
Facebook users there have been able to transfer
money to their friends free of charge on Messenger, the site’s instant messaging service, since last
year, while Snapchat users in the United States can
also send money to contacts using “Snapcash”.
Snapcash is designed to enable users to exchange
money quickly and easily when splitting the bill at a
restaurant or paying someone back for concert
tickets, for example.
And social media payments seem likely to arrive in
Britain soon thanks to the relaxation of strict European laws that govern who can offer digital
payment services. A revised EU directive is due to
become UK law within the next 18 months, opening
up the way for social media transfers.
But with new social media hacks and scams hitting
the headlines every week, is it really safe to send
money via Facebook or WhatsApp?
Security and scams
Cyber criminals love to exploit the security weaknesses of social media sites and apps. In 2014, for
example, hackers posted 4.6 million usernames
and phone numbers online.
Facebook, which owns WhatsApp, has a big problem with fake accounts being set up in legitimate
users’ names, a scam that could easily be used to
trick people into sending money to the wrong
account.
The website, which is reportedly working on a
mobile payment feature that will allow users to
make card purchases in shops and restaurants,
claims that it has taken steps to ensure that Messenger payments are secure. These include asking
users to create a Pin or use fingerprint ID to authorise transactions.
“We use secure systems that encrypt the connection between you and Facebook as well as your
card information when you ask us to store it for
you,” the company said. “Payment systems are kept
in a secured environment that is separate from
other parts of Facebook.”
'Payment systems are kept in a secured environment that is separate from other parts of Facebook,'
the company said
Dave Birch of payments consultancy Consult
Hyperion backed the company’s line, arguing that
storing your card details with a social media app
was safer than sharing your bank details by email.
“If you wanted to make a transfer using WhatsApp,
you would need both my phone and my password
to do so,” he said.
Hackers are not the only potential problem,
though. The ability to send money via a social media
site may make vulnerable people easier targets for
confidence tricksters. There is also a danger that the
speed and ease of social payments will attract
criminal users.
How social media payments work
To use payment services such as Snapcash and
Facebook Messenger, you must be 18 or over and
have registered a debit card to your account. Credit
cards, PayPal accounts and prepaid cards are not
accepted.
As the services are currently available only in
America, the linked accounts must also be US
based. Once set up, they are quick and easy to use.
To send money via Facebook Messenger, for
example, all you have to do then is open a chat with
a friend, press “More” and then tap the $ icon
followed by “Pay”. To receive a payment, meanwhile,
you simply open the chat and click “Add card” to
add a US debit card to be credited with the
payment.
However, you cannot reverse a payment made in
error