The Link between Social Networks and Faster Payments
The push for faster payments has reached a fever pitch and almost all payment processors have some sort of solution. While each have identified target verticals, few have taken full advantage of a common denominator, social networks.
Of course, each of these companies have a Facebook page, tweet commentaries and post photos on Instagram. But they fail to appreciate the psychological similarities of a reading a social post and receiving an instant payment. Or that the ease of information sharing has forever changed customer’s expectation for payments.
Instant Payments and Social Media Make Customers Happy
When people post, like, share or comment they are creating the expectation of a response. When that response is quick, then there is a chemical release in their brain that provides a rush of happiness. However, when that response is delayed then there is a rise in anxiety. The longer the expectation is not met the more dissatisfied they become.
Well the same process occurs when a gig worker, insurance claimant or reward recipient is waiting on their payment. They have completed the required tasks for payment and have the expectation of a response. With traditional payments like Checks or ACH, the delay in meeting their expectation causes dissatisfaction. And that can result in an unconscious bias against the company. To the contrary, when a business provides instant payment into their debit, credit or checking account, then the customer is delighted and they are rewarded with the same release of dopamine they get when someone shares their cat video. A good payment experience trains the customer’s brain and creates a favorable opinion of the payor. And that increases the likelihood they will continue to engage with the company.
Social Networks are Marketplaces
Most payments providers have identified the marketplace vertical as a prime opportunity. There are dedicated marketplaces like Fiverr, Guru, Home Advisor, Task Rabbit and others that cater to the growing on-demand economy. And Facebook even has a section called “marketplace” where people and companies can sell products in their local community.
In reality, all social networks can be defined as marketplaces. They market ideas, concepts and opinions and the largest influencers on these networks have unbelievable reach. Users choose the types of content, how and when they consume it and they demand it to be immediate. When a company promotes its services in this environment it has by default committed to faster payments. Social media influencers that do “shout outs”, promote content or endorse products/services don’t want to wait for a check in the mail. So, the company needs a solution to deliver instant funds directly into an influencer’s preferred financial account.
Memes Cross Borders - So Should Payments
Whether it is an inspirational quote or the latest “fake news” social posts circumnavigate
the globe in seconds. Sending money home or being paid for content creation should be just as easy. But many companies are forced to limit sales domestically due to the inefficiency, complexity and cost of international payments.
Western Union, MoneyGram and Transfer Wise have all launched chatbots on Facebook Messenger that allow for international P2P payments. And Snapchat has Snapcash for P2P payments between registered accounts. But each uses their own proprietary system and which do not provide the frictionless transaction flow that social network users expect in this medium.
Payments providers still have a way to go to simplify the process and deliver the transparent experience that social network users expect. But the industry has accepted that faster payments are here to stay and that is a good thing for businesses and consumers alike.