This article was published on January 31, 2011

Could the world’s biggest bank become…Facebook?

Could the world’s biggest bank become…Facebook?
Niall Harbison
Story by

Niall Harbison

Niall is a social media advocate and co-founder of digital marketing agency Simply Zesty. He helps small brands get their message out to the Niall is a social media advocate and co-founder of digital marketing agency Simply Zesty. He helps small brands get their message out to the world and engage with their customers using the free tools available to them.

Several start-ups out there deal are trying to get in on the virtual currency market and one of the brightest companies I’ve seen do it thus far is  Ven. Ven founder Stan Stalker gave an exciting interview to Robert Scoble at Davos last week which I have embedded here for you to listen to.

Stalker founded Ven because he thinks there is a huge need for a virtual currency online that trades on open markets around the world and that we can pay for goods and knowledge with. Very smart thinking but nothing new although their execution and ideas do look very smart. As he says in the interview, virtual currency is nothing new and has been around since the days of Second Life but their currency is made for the social web and that is what could make it work because people are already paying for virtual land, apps, swords and gambling online with virtual money.

Listen To This

If you work in the online world or social media then take 20 minutes to listen to this. It starts slow but is some of the most insightful stuff about where the web is heading in terms of monetization and just how powerful Facebook and other social networks could become.

Facebook And Goldman Sachs

If there is one team that you want on your side when you are trying to monetize your projected billion users then it is the wise heads at Goldman Sachs. Did Facebook bring them in for a bigger reason than just to help with their IPO or could it be to help them navigate the tricky financial banking sector? If Facebook does manage to start pushing money and transactions through the social graph while taking a small percentage that could effectively make them one of the biggest holders of money in the world and that is a position that Goldman Sachs is pretty used to and experienced at already.

600 Million Bank Accounts?

We all know the number of accounts on Facebook at this stage and it’s an impressive number. They don’t have credit cards attached to them all yet but that could come pretty easily in the future. It’s such a big number that if Facebook could even get people spending $10 a year they would have a $6 billion turnover business. If they manage to eat into Google’s territory and bring more commerce to the platform then that number increases significantly. Buying has always been a highly social activity and we can already see some great examples of brands building shops and social shopping experiences on Facebook. This will only evolve and improve.

Facebook Credits

Although mostly confined to Facebook games at the moment I am a firm believer that Facebook credits will be the fuel that really powers Facebook’s IPO. Sure they are making a lot of money from advertising and they are very good at that but imagine if I could top up my account and make small purchases via Facebook or pay for content (like Netflix). In some ways I think Facebook has been cautious by only containing this to games for now but Facebook credits will be the main virtual currency online in a couple of years time. Ven, the currency described above would actually be a different currency that would trade against other better known currencies and allow you to cash out your credits virtually? Here is a video describing Ven.

Real World Integration

So all the little coffee shops on Facebook, the restaurants, the high street shops with tens of thousands of followers. Imagine if they could start selling via Facebook and monetizing their following. Imaging if using my mobile, I could check in with my phone and see what my friends had bought before me in a clothes shop. Imagine instead of carrying money I could just use my Facebook credits on my mobile. Imagine if I could get a discount for liking their page or sharing my purchases with my followers. Imagine if I could buy your coffee for you and tell our friends that I bought it for you. All of that is the future and it’s coming sooner than you think.

What do you think? Will Facebook become the world’s largest bank or is this just more hype?

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