Transactional data reveals much about a customer to a merchant. Facebook’s social data doesn't have direct ties to spending, but it paints a detailed picture of the consumer that retailers could use to create pertinent offers that shoppers will actually use.

Just as banks collect relevant data on life events, such as when a couple needs a mortgage to buy a home or needs to start saving for a child's education, social media giant Facebook has been collecting data on its users since the beginning. Facebook's data includes what companies its users like, what clothes they wear and what personal struggles or inspiring achievements they’re going through.

“Facebook is in a good position to bridge product sales and customers,” says Adil Moussa, principal at Adil Consulting. “The ability to gather information and profile customers helps a lot.”

Facebook's data may not be enough by itself to create truly targeted offers, but combining it with transaction data "has a lot of potential benefits," says Dave Kaminsky, an analyst with Mercator Advisory Group.

Recently Moxie Software Inc., which focuses some attention on customer interaction management, created the Engage+ app, aggregating data and alerting companies when users that might be interested in their brand sign in. The app also allows brands to access user profiles to send personalized targeted offers.

This app highlights how meaningful Facebook user profile data can be to retailers.

But transactional data remains more useful than social data, says Jacob Jegher, a senior analyst with Celent’s banking group.

When Facebook users click the 'Like' button next a company's page or an ad, they telegraph this affinity to their peers — but that doesn't mean they'll spend money, he says.

“Today the value of a 'Like' is almost meaningless,” Jegher says. “The value of what [consumers] are liking isn’t tangible and doesn’t evolve into transactions.”

Many Facebook users will like pages to enter a contest or even to highlight items or topics they don’t appreciate.

Liking a merchant page doesn’t provide much information, says Jegher, but liking a specific product or offer is more interesting for the retailer. And posting relevant offers, such as Amazon’s offer of $5 off of a $25 purchase, provides beneficial advertising since the offer is visible to users' friends, he adds.

American Express Co. ran campaigns that allow cardholders to link their Amex cards with Facebook and Twitter. Through the “Link, Like, Love” application, cardholders receive customized deals through Facebook.  When Amex cardholders sync their account with Twitter, they get rewards for posting with certain hashtags, which are keywords preceded by the # sign to make them easier to search on Twitter.

With many payments players trying to exploit Facebook’s data and the social network itself continuing to test ecommerce services, such as September’s announcement of Facebook Gifts, the industry rumbles about Facebook's potential as a virtual financial services institution.

“Many people say Facebook could challenge the networks, but that’s not true,” Kaminsky says. “The payments industry is much more complicated than outsiders tend to give it credit for. We’ve seen established companies attempt to address payments and fail miserably or back out before they have a chance to fail.”

While Facebook is currently licensed in some U.S. states as a money transmitter, it "has a long way [to go] before providing truly valuable payment services … plus there’s no indication that’s what they’re trying to do," he says.

Not to say social banking hasn’t been tested.

In July, Commonwealth Bank of Australia announced it would be launching a CommBank Kaching Facebook application before the end of 2012. The app would allow users to view transactions and balances, initiate third-party transfers and make peer-to-peer payments.

Facebook could provide a beneficial platform for P2P payments, similar to the recent Dwolla move to facilitate payments via Twitter, Kaminsky says. In this way, consumers could use recipient’s Facebook account like PayPal uses email addresses to identify accounts.

Facebook has taken over a lot of what email used to be used for,” says Kaminsky. “As PayPal took advantage of people’s familiarity with email, another company might take over the same aspect but with Facebook.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry