Revolution Money Adds Facebook App for P2P Payments, Pays $25 Bonus

image As Facebook and other social networks move into various ecommerce activities, payments will take a larger role. There are rumors that Facebook may be developing its own payment capabilities, but that seems outside its core business, so I'm skeptical. 

There are several payment companies already vying for attention at Facebook:

  • PayPal launched a Facebook app in July; it allows users to collect funds from friends or to raise money for a cause (previous coverage here).
  • PayMe is a service that uses the PayPal engine for person-to-person payments (previous coverage here).
  • Chip-In also uses the PayPal engine to gather group donations for a specific goal (previous coverage here ).

imageThe latest on Facebook is Revolution Money, the credit card alternative backed by AOL founder Steve Case. In December, the company launched a Facebook application to support its person-to-person service, MoneyExchange, which is aimed squarely at PayPal's lucrative franchise (screenshot below). Users that sign up on Facebook receive a $25 bonus (through Feb. 29), an offer that is not available on the main MoneyExchange website.

So far, the Facebook is light with only 16 daily users listed today. But as social network users find out how easy it is to settle their debts with friends through the network, we expect a significant volume of funds flowing through the social networks. 

For more information, read our Social Personal Finance report (Online Banking Report #142/143). 

Revolution Money's MoneyExchange App on Facebook

image

KeyPoint Credit Union Launches on Facebook through mShift Platform

Link to Key Point Credit Union KeyPoint Credit Union is the first financial institution to launch full-fledged account access through Facebook. Using its mobile banking engine powered by mShift, members can view account balances within their Facebook account (see screenshot below).

To view their balance within Facebook, users must add the KeyPoint application to their Facebook account. The first time it's used, users must log in to their Key Point account using their normal username and password. On subsequent visits, balance info is automatically displayed with no login, provided the user is logged into their Facebook account.

In addition to balance info, the KeyPoint application displays content taken from the credit union's homepage.

Analysis
Even though the application is relatively simple, we are giving it our OBR Best of the Web award, the second one this week, and the sixth in 2007 (see previous coverage here). Placing account balance info within Facebook is a great way to demonstrate commitment to social networking members. There are privacy issues with displaying data without a banking login (note 1), but it's reasonable to let your customers decide for themselves if they are comfortable with this setup.    

Screenshots
KeyPoint Facebook application prior to first authentication session:

Key Point Credit Union Facebook application

After initial authentication, account balance info is automatically displayed:

Key Point Credit Union Facebook application

Note:

1. Other Facebook users cannot see the balance info, but someone sharing the computer might see it.

Create Your Bank’s Facebook Page (before someone else does)

Is it just me or is it hard to keep up with all the developments at Facebook? I guess if you are worth $15 billion, you have to keep hustling.

Much of the news out of Facebook has little to do with retail banking. So, you may have overlooked this week's announcement of its new ad platform and promotional tools for businesses and organizations (for a concise, 340-word summary and analysis, see Wednesday's TechCrunch post here).

In the official Facebook press release (here), Chase is listed as one of 12 "landmark partners" in the advertising program. Other than the existing Chase +1 group, with an impressive 40,000 members, it doesn't appear the bank has launched a page yet.

But that shouldn't stop you. To create a Facebook presence, you don't need to be a landmark partner, a mega bank, or even have ten bucks left in your budget. The new company pages are free and you can set one up here in a just a few minutes .

As a test, I built an Online Banking Report page in about 90 seconds (here, screenshot below). It took an hour to show up in Facebook search, so don't panic if it's not there right away (see note 1).

Even if you post only your logo and website address, I recommend doing so right away. That will help ensure that you, and not some crook or prankster, creates the page that's associated with your brand at Facebook. For extra credit, add Facebook to your periodic Web searches to see if anyone is wrongly using your brand name.

As an added payback for my 90 seconds of work, an hour after creating my page, Online Banking Report is the one and only page shown for "banking" searches (see note 2).  

You also have the option of creating pay-per-view or pay-per-click ads to drive traffic to your page. Currently, the advertising is very affordable with prices starting at $0.15 per thousand impressions or $0.01 per click. Ads can be targeted to Facebook demographics.

Notes:

1. When I thought I'd lost my Online Banking Report page, I created a second page for NetBanker here

2. There are many other search results for "banking," but Online Banking Report is currently the only one under the new "Pages" designation. Overall, Facebook search is currently pretty weak, but with the $240 mil from Microsoft, it should be state-of-the art by this time next year.  

Facebook Battle: Students 1, HSBC 0

My teenage son has just starting "Facebooking," and he loves it. It's his first foray into social networking, and I can tell he'll be a user for the rest of his life, or at least until something better comes along.

Those of us who are merely parents of social network users often find it difficult to understand its power. In my son's circle, Facebook IS the Internet. It's where every online session begins and ends and where important social connections are made and nurtured. That's why strategic investors such as Microsoft, Google and others are said to be giving Facebook as much as a $10 billion valuation (see previous coverage here).  

All this has enormous implication for every retailer and service company on the planet. It amplifies word of mouth exponentially. Remember the old adage that every disappointed customer tells 10 people about their problem. With the instant broadcasting capabilities, an unhappy customer can now share his/her thoughts with 100+ Facebook friends with a single click (note 1).  

And it's not something that is 15, 10 or even 5 years away. It's happening today. Case in point: this summer HSBC (UK) was forced to reverse a policy change that would have ended a common perk for U.K. student banking accounts, a multi-year grace period for overdraft credit lines with limits up to US$3,000 (see HSBC student page here).

Local students were so taken aback by this change in account terms, they formed a Facebook group called, "Stop the Great HSBC Graduate Rip-Off" (here or see screenshot below). Apparently the group was planning to rally its 5,000 members into a little civil disobedience. The group was hoping to cause customer service headaches by flooding the bank's branches, and overloading teller lines, with student customers asking for detailed explanations of the new fees.

According to news reports (here and here), the bank quickly backed off the rate change and reverted to the liberal interest-free borrowing guidelines.

Implications
You should be using, tracking, analyzing, and brainstorming about how to tap social networks for sales, marketing, service, and recruitment.  

Note:

1. And the simple click-and-complain activity can be broadcast to every friend before the disgruntled customer has a chance to cool down (and/or sober up) and think through the issue in a more rational way.

Geezeo iWants Facebook Users

 

I check Facebook about once or twice per week to see what new financial apps have been posted. So far the ones we've looked at include (see previous coverage here):

  • Lending Club's P2P marketplace
  • Prosper's Fantasy Banker
  • PayPal
  • Wesabe
  • Buxfer
  • TD Bank's Split It
  • Obopay's BillMonk

The latest entrant, iWant from online personal finance specialist Geezeo (see screenshot below). iWant is an application that allows Facebook users to share with friends their wants and needs, such as "buy an iPhone" or post more goal-oriented items such as, "pay off my student loans" or "throw a graduation party." And Geezeo ties it up nicely by tapping PayPal's API to facilitate "contributions" to the financial goals. It's also integrated into Geezeo's online personal finance application so users can track their goal progress in real time. ChipIn offers similar payment functionality in its Facebook app (previous coverage here).

I wonder if Geezeo will make a P2P lending play here? If Geezeo's software included a repayment option, the iWant "donors" could easily become iWant "lenders" and a whole new market might open up. 

If you are attending our upcoming FINOVATE conference next week in New York, you'll be able to ask co-founders Peter Glyman and Shawn Ward yourself. We are fortunate to have not only Geezeo, but two other early Facebook innovators, Prosper and Lending Club on the DEMO stage. If you can't make the event, check our website in two weeks for full length videos of each DEMO.

The Aging of Facebook Makes it a More Appealing Platform for Financial-Services Firms

Facebook traffic from comScoreDue to Facebook's roots as a college-only social networking site, as recently as last year you had to use a .edu email address to gain admittance, it has remained a young person's playground much longer than MySpace. However, much to the chagrin of my college-age niece and her friends (note 1), Facebook has aged rapidly this year.

As you can see in the inset, in May, comScore reported that more than half of Facebook visitors were 25 or older (see full press release here and note 2). Using this chart, we estimate the median age of a Facebook visitor was about 23 a year ago and now it's closing in on 30 (I'd guess 27 or 28 based on the comScore data). Even more frightening for the younger set: last month there were 2.6 million more unique visitors over age 35 than in the 18-24 category. We noted this trend at MySpace last year (here).

Significance for Banks
As you consider your social networking strategy, don't think it's only for the under-25 crowd. Some of your prime customers, the 30-somethings with new families, new cars, new homes, and accelerating careers, also keep in touch with friends via social networks. Refer to Online Banking Report, Social Personal Finance, for a long-term forecast and strategic options for financial institutions. Also, see our earlier post on the Top-10 Banking & Money apps on Facebook here.

Facebook Lingo Defined
For those of you new to Facebook, Ad Age ran a sidebar off its lead article this week, This 23-Year-Old has Google Sweating, explaining a few key Facebook terms:

  • Minifeed: Like an RSS feed, that automatically updates everyone on your friends list of any changes you make to your profile, including removing items. This feature caused a bit of a revolt, due to privacy issues, when introduced last year. But now it seems to be an important part of the network. It's especially critical for the viral spread of new applications such as Lending Club or Chipin. Unless they opt out, every time a Facebook user adds an application to their account, all their friends are notified in the mini-feed.
  • Poke: The virtual equivalent of smiling at a co-worker passing in the hallway; a way to connect with someone without the more formal protocols of email, text, or voice messaging.   
  • The Wall: A place to write comments on your friends profile, or respond to comments on yours.
  • Tag: Allows users to associate names with the people in the pictures they've posted. As Ad Age says, "a college grads worst nightmare when it comes to the ever-crucial job search."

Notes:

1. This summer, my niece, a college sophomore, couldn't believe that I had a Facebook account. And she was more than a bit skeptical of my claim that I was tracking the social network for my blog and newsletter. To her, it's a privileged place for her friends to communicate: uncles, aunts, and especially parents, are definitely not on the invitation list. It will be interesting to see what happens to the hip kids as the establishment invades their turf. The Wall Street Journal had a similar story this week about fellow workers and even bosses requesting to be added as friends in social networks (here).

2. comScore is reporting the demographic profile of visitors, NOT the active-user base, i.e., those that maintain profiles. Active users would undoubtedly skew younger.

Top-10 Facebook Money & Banking Applications

 

After six short weeks, there are 48 applications in Facebook's Money category. At Netbanker we are most interested in the 14 directly related to banking, payments, and lending. So here's the most-used list with the stock trackers, calculators, and shopper apps removed. Lending Club continues to lead the pack as it has since its May 24 launch in conjunction with the new Facebook platform. Applications are listed by number of Facebook users that have added them to their profiles.

Top 10

1. Lending Club by Lending Club >>> 11,012 users

Lending Club enables those in the Facebook community with good credit to easily borrow from each other with a trusted third party managing the process and assessing the risk. Previous coverage here.

2. Fantasy Banker by Prosper >>> 4,674 users

Prosper bills Fantasy Banker as a twist on HOT or NOT, "a fun & educational way to get acquainted with person-to-person lending by betting on whether real-life Prosper loan listings will fund or not." Previous coverage here.

3. My Bucks By Aryeh Goldsmith >>> 3,926 users

A virtual currency called the Facebuck.

4. BillMonk (Obopay) by Charles Groom and others >>> 2,793 users 

BillMonk is an expense tracker specifically designed to track debts and obligations (such as rent) between individuals. Used Facebook APIs long before the F8 platform was announced. Previous coverage here.

5. Buxfer by Shashank Pandit and Ashwin Bharambe >>> 1,482 users

Buxfer is another expense tracker specifically designed for singles sharing households expenses. Previous coverage here.

6. Pay Me by Yellow Media >>> 842 users

Pay Me was developed by a third-party developer to make it easier to initiate PayPal payments right from Facebook. Previous coverage here.

7. ChipIn by ChipIn >>> 830 users

ChipIn is a simple way to collect funds for an event, trip, or anything. Users create a clickable badge that is displayed in their profile. Other Facebook users chip in via the PayPal network. Previous coverage here.

8. PayPal by PayPal >>> 500 users

The official product from PayPal, the division of eBay. So far, merely allows you to easily request money from your Facebook friends. More functions are said to be on the way. Previous coverage here.

9. Ven by Hub Culture  >>> 154 users

Another virtual currency.

10. iSpend by Reman Child and Shawn Gupta >>> 141 users

A new financial tracking app posted last week. 

The Rest
11. Wesabe by Wesabe, Inc. 
>>> 104 users

The Wesabe Facebook app currently supports group discussions. It is not currently linked into its Web-based personal finance app. Previous coverage here

12. OmniSpense.com by Jonathan Kelly >>> 60 users

The newest expense tracker, appeared in the money category in the past 48 hours, but looks like it may have been posted about 2 weeks ago. 

13. BillTrack Bill Reminder by Michael Irizarry >>> 59 users

Bill Track is built specifically for tracking bills (surprised?). It was posted earlier this week. 

14. My ViCu by Myvicu Master >>> 17 users

Yet another virtual currency.

PayPal Really Launches on Facebook

PayPal application shown within a Facebook profile Two weeks ago I heard from PayPal corp communications who felt that my “PayPal launches on Facebook” title was misleading. They had a point. As I explained in the post, the new Facebook app was PayPal-powered but developed by Australia’s Yellow Media. The title could have been better.   

However, that’s moot now since PayPal has now launched its own app on Facebook (here). It appears to have been posted on July 3 and has 218 users as of this morning. The application provides a simple interface to request and track money requests from Facebook friends (see inset above). Additional functionality is said to be on the way.

ChipIn, Another PayPal-powered Application Launches on Facebook

Link to company Watching the explosion of content, and users, at Facebook, may be the most interesting thing we've seen since the rise of the commercial Web in 1995/1996. Marc Andreessen, not know for hyperbole, had this to say in a lengthy blog posting (here) that should be required reading for all content providers, including banks and credit unions:

(Facebook Platform) is an amazing achievement — one of the most significant milestones in the technology industry in this decade.

Every time we head over to the Facebook application directory, there's an interesting new financial app. Friday we found ChipIn, a nifty little widget that allows users to post a badge on their Facebook page or website that allows users to contribute money for a certain event or cause. It can be a charitable event such as Vancity's Bike Share program or a private event such as pooling funds for someone's birthday party. ChipIn is the second developer to launch on Facebook using PayPal's engine. The first was PayMe (see our coverage here).

ChipIn <chipin.com> is a Honolulu-based firm formed in mid-2005 with seed funding from CommerceNet. The company emerged from stealth mode in Feb. 2006 and launched its service on the Web in November 2006. The Facebook app launched June 24 and has 415 downloads as of 9 AM this morning, impressive growth compared to the 134 it had on Friday.  

Initially, ChipIn was a full-service payments company, actually holding and managing the funds for users. However, after a few months of those headaches, it outsourced all payments-related functions to PayPal. Check out the Chipin blog for the full company history.

How it Works
Sample chipin badge ChipIn uses the PayPal engine to do the heavy lifting similar to PayMe that we wrote about two weeks ago (here) (see note 1). To create a ChipIn badge on Facebook, users select a Facebook event (created separately within the social network), set the fundraising goal, then customize the text and colors of the widget.

In our test, we created a ChipIn badge with the goal of raising $100 to donate to Vancity's Bike Share program (see screenshot #1 below). Although, we were able to successfully install the widget on our Netbanker Facebook page (see screenshot #3 below), we had trouble with the customization. Every time we moved from the customization step to installation, our changes were lost (note 2).

To use the widget, visitors click on the "chip in" button to launch a PayPal window. Users choose an amount to pay, then login to PayPal, to complete the transaction. A progress bar on the Chipin widget shows the progress towards the fundraising goal. 

With a single click the badge can be placed within an individual's Facebook page (see screenshot #2 below). ChipIn also provides cut-and-paste code to load the badge on any blog or website. ChipIn badges can also be built directly through its website without the need for a Facebook account.

Financial Institution Opportunities
PayMe and Chipin are cool little apps that can and should be sponsored by banks, credit unions, or card issuers. Although the PayPal brand name makes Chipin relatively trustworthy, a widely recognized financial brand would be even better. At this point, ChipIn is still a tiny, relatively unknown company. If I were at a major bank, I'd write them a $50,000 check and have them rename their Facebook app, "Chipin by YourBank," instantly becoming the first bank with an official Facebook app. The company will also build white label versions you could provide to customers for use outside Facebook.  

For more on how to use social networking in financial services, see our Online Banking Report on Social Personal Finance.

Screenshots

1. Simple ChipIn Widget Creation
Using an existing Facebook account and an existing Facebook event, in this case Vancity's Bike Share (thanks to William Azaroff), a new widget can be created and posted to your Facebook profile in about a minute.

2. Facebook Promotion
Once the badge has been created, the Facebook integration provides simple ways to promote the cause. You can invite up to 10 friends each day, post it on your Facebook profile, or cut and paste the code onto your own website or blog. But the key to viral growth is the Facebook mini-feed which automatically notifies all your friends about any Facebook activities, including the addition of the Chipin badge to your profile.

Posted on the NetBanker Facebook Page
Here's how the ChipIn badge looks on my Facebook profile page (here). Note, you'll need to be logged in to Facebook to view.

Notes:

1. PayPal is not the developer of Chipin, nor do they have any financial interest in the company. Chipin is an independent developer using PayPal APIs.

2. Tests conducted on July 5 using Firefox 2.0.

PayPal Launches on Facebook: Who Wants to be the First Bank?

The social networking phenomena has entered a new phase: eCommerce. It has always been a bit hard to visualize mainstream businesses, like banks, book sellers, or phone companies making a profit on MySpace. It's been a great place for musicians and online dating companies to grab market share, but a MySpace Checking Account didn't seem just around the corner (see MySpace coverage here).  

All that changed May 24, when Facebook opened its network to outside developers, making its service more like Windows than MySpace. Already the service has grown by 3 million users, more than 10%, in the past 4 week, to 27 million (see Facebook profile in today's Wall Street Journal).

More interesting are the 893 new services have opened their doors on the platform. The most popular, Top Friends by Slide, already has 6.4 million users. Yes, that is no typo, in one month a Facebook service grew to more than 6 million users. With traditional marketing, it would have cost a bank or card company as much as $1 billion to attract that many customers assuming acquisition costs of $100 to $150 per new account. 

And it's not just the one app. A new Seattle-based music preference service, iLike, has added 3.8 million. There's not a whole lot happening in commerce apps YET, the first financial company with a service offering, Lending Club (see previous coverage here), is the most popular business app, with just under 10,000 users. That's about what iLike attracts in a busy hour, but for a financial services company, and especially a startup, that's huge, a grand slam using tired baseball metaphors.

For many reasons, it takes longer for traditional companies to pounce on new opportunities. But over the summer we'll start seeing hundreds of businesses launch on Facebook. By next year at this time, the Facebook apps directory will probably look like the New York City Yellow Pages (or at least San Jose).  

Financial Institution Opportunities

Searching the site, we only see four financial services that have launched on Facebook:

  • Lending Club's person-to-person loan marketplace
  • Prosper's lending game
  • Wesabe's personal finance groups
  • Pay Me, a payment service developed by Australian Ad Agency, Yellow Media using the PayPal engine (screenshot below, we'll provide more details once we finish testing it)

But so far there is no:

  • Bank
  • Credit union
  • Credit card issuer
  • Mortgage lender
  • Brokerage (although there are several stock monitoring service including Forbes, Yahoo, and Social Picks)
  • Rates tracking service
  • Credit report monitoring service (though Identity Guard is advertising heavily today)
  • Identity theft protection service

Let the race begin. But you better move faster than you've ever moved before, if you want to get the huge first-mover advantage on the Facebook platform. Good luck.

For more information, see our latest Online Banking Report, Social Personal Finance.

Pay Me on Facebook using PayPal

Venture Funding Flows to Wesabe and Prosper; Wesabe Launches on Facebook

Link to Wesabe on Facebook Two potentially disruptive startups, Prosper, the leader in U.S. P2P lending and Wesabe, the first-mover in social personal finance, both announced new funding rounds today:

  • Prosper took in $20 million, bringing total funding to $40 million (previous coverage here)
  • Wesabe added $4 million to its bank account, bringing its funding to $4.7 million (previous coverage here)

These are sizable bets on on niche markets that haven't thrown out a lot of revenues so far. But whether they succeed or not, the money will certainly fund additional innovations that will be educational for those in the banking industry. 

Case in point: Wesabe launched an app on the Facebook platform, becoming the first personal finance company to do so (screenshot below). So far it's a simple front door to their group discussions, but with more development resources, it could become a full-fledged "bank" running within the Facebook community.

For more information on Wesabe refer to our latest Online Banking Report, Social Personal Finance (here).     

Wesabe's application on the Facebook platform

New Person-to-Person Lender, Lending Club, Hopes Facebook Linkage Allows it to Prosper

Link to Lending Club homepage Just as we are putting the finishing touches on our latest Online Banking Report, which looks at the intersection of personal finance and social networks, a new person-to-person lender launches. And how do they plan to gain traction? Through tight integration with Facebook, the second-largest social network. So we are holding the presses, and adding this important new development to our upcoming report.

We'll have much more on it later, but if you are curious now, login to Facebook and check out Lending Club (the easiest way is to login via the link at the top of the Lending Club homepage). Or read Colin Henderson's great analysis here.  

Last year, Facebook developers created a proof-of-concept personal finance app, originally called Facebank, then changed to MoochSpot (see previous coverage here). That effort was designed to show how third parties could leverage the Facebook API to create new services. It didn't take long for someone to take the bait. Within a few weeks, BillMonk created an interface to Facebook to support their expensing tracking service, now owned by Obopay. Buxfer also supports login via Facebook's username/password (post here), but does not link into the social network as yet.

But Lending Club is the first to leverage the Facebook interface to support actual financial transactions, in this case lending/borrowing. The company is modeled after Prosper. Lending Club timed its launch to coincide with the Facebook developer's meeting and launch of Facebook Platform.

We'll be testing it during the next few days and will report back on whether its a challenge to mainstream lending, or merely blog fodder. Given the rising power of social networks, my guess is the former. 

LendingClub homepage from outside Facebook

LendingClub homepage mockup

LendingClub homepage from inside Facebook

LendingClub page inside Facebook