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Don’t worry, Facebook won’t be opening up a bank for its 1.9 billion+ userbase. But it will be getting deeper into the payments game. The social media giant is aiming to leverage the existing banking infrastructure, by enabling faster payments through partners, instead of trying to replace the existing channels, according to Kahina Van Dyke, global director of commerce and payment partnerships at Facebook. “Facebook has no interest in becoming a bank,” she said, adding that the company does not even view payments as a revenue play for the business – merely as a channel for advertising revenue, as well as to increase time on the site.
The wind of change in the payments world is gaining in strength as financial technology’s “fintech”, potential to alter how, where and when payments are made – as well as who it is that facilitates them – is further explored and leveraged. According to a report by Statistical, the projected investment by the banking industry on new technology in North America will be $19.9 billion. The leading area of bank spending on financial technologies is on mobile payments. FinTech companies around the world are disrupting traditional banking relationships and processing models and introducing new payment delivery technologies, it is reinventing financial services as we know it, and creating new opportunities for startups and established industry leaders alike. As banks position themselves at the center of the payments industry of tomorrow, banks must act today to understand, interact with, and cherry-pick from the full smorgasbord of fintech expansions.