Facebook joins hands with Paypal to help users transfer money

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PayPal introduces Facebook app for sending money. Photo - thesocialmediatoday.com
Paypal has come out with an app called ‘Send Money’ that lets you send money to your friends on Facebook. The new application allows you a choice of either sending an e-card with money or just money.
PayPal and Facebook infrastructure have now merged. This is another way to personalise the act of giving money,Paypal’s Anuj Nayar said. ‘Send Money’ will be the first Facebook app which enables peer-to-peer payments via Facebook and Paypal without any transaction fee, though Paypal’s regular limits and international fees still apply. The free is available to people with US bank accounts at the moment.
“Sending money, person to person, is free, if its funded by a PayPal balance or linked to a bank account,PayPal Senior Product Marketing Manager JB Coutinho explained.
The choice of combining sending money with e-cards is expected to leverage the growing market for e-cards, which is estimated to grow around 500 million ecards every year. PayPal is offering dozens of choices for everything from birthdays to congratulations, to tap into this lucrative market segment.
Experts say the move is a big step towards making social payments a reality. The app can be used for a variety of payments like sending money to your family, reimbursing friends for lunch or just about anything that you would otherwise have to do with hard cash.
Facebook, world’s largest social networking website with more than 800 million members has recently partnered with Skype, Spotify and Netflix. Its partnership with Paypal is set to leave a huge footprint in the Internet arena and pose a direct challenge to Google.
While it’s not clear how this will affect credit card companies, traditional money transfer companies will be hit hard.
With Send Money app being extremely user friendly there is little doubt how popular this option would be. However, there is always the question of how well privacy and security of users will be safe guarded. Facebook has come under severe criticism for making privacy settings notoriously complicated for its users. Public profile and compromised privacy settings leave the doors open to hackers who prey on confidential private information.
Security experts at Arabian Gazette said they were apprehensive about security awareness among Facebook users. “People need to be made aware of pros and cons regarding the usage of these sort of payment mechanisms,” said an expert on condition of anonymity. “Many social network users deal with spam originating from West African nations on a daily basis. Now, with these new applications, there could be newer avenues for e-crimes,” he added.
Sources: Mashable, Economic Times, Engadget
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