As money and payment systems become more mobile in search of ever greater convenience, such technology is increasingly becoming associated with everyday financial transactions. Although it may seem a strange concept at first, it is perhaps not surprising that in such a climate social media could be the next money spending medium.
The hugely popular social networking site Twitter has just agreed a deal with Groupe BPCE which will enable French users of the social platform to send money to one another via a tweet. Although Twitter has specifically inked this agreement with Groupe BPCE, users signing up for this service will be able to send money irrespective of which bank they hold an account with.
Social Media First
This represents the first time that Twitter has agreed such a deal with a bank. The service will utilise a service called S-money, which is an electronic money subsidiary of Groupe BPCE. Currently, this bank is involved with providing a variety of mobile wallet solutions, but the deal struck with Twitter will see them experimenting with social platforms for the first time.
Jean-Yves Forel, chief executive officer of commercial banking and insurance for Groupe BPCE, has stated that this new initiative is an example of the bank’s innovative strategy with regard to everyday payments, and it considers it a pioneering concept which will spread like wildfire in the near future.
Although this is a first for Twitter, it is merely the latest attempt by the social networking site to monetise its large user base. Back in September of last year, the microblogging website launched a ‘buy button’, which is intended to enable people to shop via the social media platform.
It is worth noting that though this is the first example of a Western social media site implementing money transfer between users, Twitter is in fact following a model which has already been tested in China. Two prominent Chinese social media sites, namely WeChat and Weibo, already allow money transfer, and in China both of these commonly used social media platforms have implemented a mobile wallet feature within their functionality.
This is significant as China is currently the second largest economy in the world, and the only serious rival to US economic hegemony. Already predictions have been made that China will exceed the US economy at some point in the near future, a prognostication which dates back to a Goldman Sachs paper of some years ago. With China’s vast population of around 1.3 billion people, it certainly has a potential labour force to be reckoned with.
Money transfer in the WeChat platform has been possible since June of last year. Initially this social media site limited money transfer to users in China who have a bank card tied to the application. But since then it has been expanded to other Chinese citizens as well.
Shortly after WeChat’s money transfer launch, Weibo got in on the act launching its beta test in the same month that WeChat went live. It is generally acknowledged by the financial press that WeChat has been more successful with its new mobile wallet feature, and the owners of Weibo are facing similar issues to Twitter.
The parent company of Weibo, Sina, has been struggling to monetise this social media site, despite numerous attempts to do so, and its mobile wallet feature is the latest in this long line of efforts. Despite boasting around 150 million monthly active users, Weibo has frequently racked up losses. This is an obvious parallel with Twitter, given that the microblogging site’s hierarchy reported its yearly functional losses were equal to no less than $645m in February, 2013. This announcement ultimately led to traders wiping $6.5 billion off the valuation of the company.
The Marketing Trend
Nonetheless, this new Twitter initiative is indicative of a trend which is particularly important for the tourist industry. The link between mobile, social media and payment systems will become increasingly ingrained in the coming years. Already such payment systems as PayPal are very much household names, and with mobile manufacturers now launching payment systems which are compatible with mobile phones - such as Apple Pay - this process will accelerate in the near future.
The Digital Tourism Think Tank has frequently reported on the importance of mobile as both a marketing and vending platform, and also that many users of social media access sites via mobile when travelling. Increasingly, everyday consumers will see transferring money via mobile phone as being a normal and even desirable activity. It is thus easy to see how something like money transfer via Twitter could become extremely popular.
This Twitter initiative may be simply the first step in the widespread acceptance of social media as a valid way to transfer money. While the general public may need some reassurance about this in the near future, in the long-term it could well become as routine as using a credit card. Considering the link between social media and mobile, and the importance of targeting mobile for digital marketing, social media money transfer is a trend to which tourism marketers should pay very close heed.
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