Start the conversation
Facebook Inc. (Nasdaq: FB) is trying to cozy up with America's biggest banks.
Talk about a dirty hookup…
The social media behemoth has approached megabanks like Wells Fargo & Co. (NYSE: WFC), JPMorgan Chase & Co. (NYSE: JPM), Citigroup Inc. (NYSE: C), and others, hoping to sweet-talk them into sharing customers' card transaction history, their checking account balances, and other personal data.
Why? Because there's a ton of money to be made knowing how much people spend and what they buy. And there's even more money to be made developing platforms and applications that drive business to advertisers and make spending easy.
You don't need me to tell you why this is a bad idea – but I'll do that today anyway.
Plus, I'll tell you why it'll get done regardless.
However, as distasteful as it may be, there is a way to get yourself a piece of the pie.
A big piece.
Here's how to do it…
The Dirty Four
It's not like America's biggest banks are saints to start with.
Just consider what Wells Fargo alone is guilty of.
Then think about how much JPMorgan Chase, Citigroup, and all the other "Too Big to Fail" banks have paid in "settlements" to stay out of court.
They're all dirty.
Of course, Facebook is dirty, too.
They're selling personal data, and who knows what else, to real and virtual bidders they know nothing about, so they say, for another column on their income ledger.
Some of what they've done could fall into the fraud category under certain statutes.
Just thinking about Facebook and the big banks dancing together and whispering sweet nothings in each other's ears is frightening.
But this isn't just a thought experiment.
Facebook is reportedly asking banks for proprietary data related to where their customers are shopping with their debit and credit cards.
They already have a treasure trove of data on outside purchases bank customers make using Facebook Messenger. That service has some 1.3 billion monthly active users, according to Chief Operating Officer Sheryl Sandberg.
In a determined effort to stay ahead of competing mobile messaging services, Facebook has been hard at work trying to transform Messenger into a unique customer service and commerce hub. For example:
- Messenger already has a partnership with American Express Co. (NYSE: AXP) that Facebookers can use to contact the high-end card company's representatives.
- A year ago, Facebook cut a deal with PayPal Holdings Inc. (Nasdaq: PYPL) that allows users to send money through Messenger.
- And for some time now, Mastercard Inc. (NYSE: MA) cardholders have been able to place online orders with some merchants through Messenger using the card company's Masterpass digital wallet.
For Facebook, the magic elixir is getting all kinds of customers transacting through one of its commerce portals, which to date is primarily Messenger.
A “Blueprint to Financial Freedom”: This guy used this secret to become a millionaire. Now he’s sharing it live on camera – and you could learn how to set up a series of $822… $1,190… $2,830 payouts every single week.
By partnering with banks and seeing data, including credit and debit card spending habits and how much money and credit bank customers have access to, Facebook can lean heavily into boring-but-profitable banking businesses like payments.
It's obvious why Facebook wants to date big banks, but not so apparent why banks would want to dance with Facebook.
Here's the thing…
About the Author
Shah Gilani is the Event Trading Specialist for Money Map Press. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains.Shah is also the proud founding editor of The Money Zone, where after eight years of development and 11 years of backtesting he has found the edge over stocks, giving his members the opportunity to rake in potential double, triple, or even quadruple-digit profits weekly with just a few quick steps. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.