When it comes to sending money online, what’s the first name that comes to mind? Most would think PayPal, Venmo or maybe even CashApp as a convenient way to handle private transactions with nothing more than your smartphone.
But payment apps have limitations and flaws, which is why companies like PayPal invest so much of their capital in cybersecurity. When technology is new, it’s almost guaranteed hackers, criminals and con artists will try to take advantage. Click or tap to see a perfect example in the CashApp scam that’s spreading across the web.
But now, a new face is joining the race for your wallet: Facebook. But given its history with privacy scandals and data breaches, is Facebook’s new payment system even worth using? Here’s what we know.
Trust your wallet to Mark Zuckerberg and his merry band of friends at Facebook
Facebook has unveiled a new component to its ever-growing suite of features: a peer-to-peer payment system called Facebook Pay that lets users send money directly through Facebook chat.
According to the company, this system is designed to bring online payments to more users than ever, and will extend across all platforms owned by Facebook. This includes WhatsApp and Instagram as well, and captures a huge segment of the market that Venmo, PayPal and others might be missing out on.
The implications for such a move are massive. Political pages, already the subject of controversy on Facebook, now have an easy way to solicit donations from users and receive them on the spot.
Facebook’s online marketplace has already grown to be one of the biggest on the web, and giving users a direct way to pay merchants will make the process even more attractive.
Even crowdfunding platforms like GoFundMe will have to contend with Facebook Pay, since users can just make a post and accept funds from friends and followers.
Facebook claims the new system won’t be enabled by default, and will have to be set up individually on each platform. It plans on rolling out the update to users in the coming weeks, with WhatsApp and Instagram joining the fray in the months to come.
Is Facebook Pay actually safe to use? I’m not sure I trust them.
Skepticism is absolutely warranted given Facebook’s history of data scandals and privacy problems. But that’s not even the worst part: p2p payment apps generally offer less protection for users than ordinary bank transactions.
The reason why is quite simple. Peer-to-peer systems function a lot like cash, and although the transactions are secured from hackers that might try and intercept them, the money is gone once it’s sent.
There’s virtually no recourse against scammers and grifters like you’d find at a bank, which offers regulations to protect users from fraud. Even services like PayPal issue refunds for items that never arrive, but sending cash directly is no different than handing someone a wad of cash and expecting them to keep their word.
A perfect example is this story from the Associated Press, where an Ariana Grande fan was tricked into sending $75 dollars to an online ticket scam and she wound up losing her money entirely. Since the money had already been debited from her account, there was nothing Apple or her bank could do about it.
At this time, we have no indication Facebook plans to moderate Facebook Cash in any meaningful way. The system may be secure against hackers and unauthorized access, but so are tons of other sites that have been breached. Until there’s a way to provide recourse to ripped-off users, the platform is a risk to use.
But this is Facebook we’re talking about. I’m sure they’ll do just fine. It’s not like it continues to betray the trust of millions of users by sharing data after it promised to stop, right? Click or tap to learn about how Facebook shared user data, even after it promised to stop.