By Emily Glazer, Deepa Seetharaman and AnnaMaria Andriotis
Facebook Inc. wants your financial data.
The social-media giant has asked large U.S. banks to share
detailed financial information about their customers, including
card transactions and checking-account balances, as part of an
effort to offer new services to users.
Facebook increasingly wants to be a platform where people buy
and sell goods and services, besides connecting with friends. The
company over the past year asked JPMorgan Chase & Co., Wells
Fargo & Co., Citigroup Inc. and U.S. Bancorp to discuss
potential offerings it could host for bank customers on Facebook
Messenger, said people familiar with the matter.
Facebook has talked about a feature that would show its users
their checking-account balances, the people said. It has also
pitched fraud alerts, some of the people said.
Data privacy is a sticking point in the banks' conversations
with Facebook, according to people familiar with the matter. The
talks are taking place as Facebook faces several investigations
over its ties to political analytics firm Cambridge Analytica,
which accessed data on as many 87 million Facebook users without
their consent.
One large U.S. bank pulled away from talks due to privacy
concerns, some of the people said.
Facebook has told banks that the additional customer information
could be used to offer services that might entice users to spend
more time on Messenger, a person familiar with the discussions
said. The company is trying to deepen user engagement: Investors
shaved more than $120 billion from its market value in one day last
month after it said its growth is starting to slow.
Facebook said it wouldn't use the bank data for ad-targeting
purposes or share it with third parties.
"We don't use purchase data from banks or credit card companies
for ads, " said spokeswoman Elisabeth Diana. "We also don't have
special relationships, partnerships, or contracts with banks or
credit-card companies to use their customers' purchase data for
ads."
Facebook shares climbed sharply on the news, up 3.5% around
midday, marking the biggest gain since last month's historic
drop.
Banks face pressure to build relationships with big online
platforms, which reach billions of users and drive a growing share
of commerce. They also are trying to reach more users digitally.
Many struggle to gain traction in mobile payments.
Yet banks are hesitant to hand too much control to third-party
platforms such as Facebook. They prefer to keep customers on their
own websites and apps.
As part of the proposed deals, Facebook asked banks for
information about where its users are shopping with their debit and
credit cards outside of purchases they make using Facebook
Messenger, the people said. Messenger has some 1.3 billion monthly
active users, Chief Operating Officer Sheryl Sandberg said on the
company's second-quarter earnings call last month.
Alphabet Inc.'s Google and Amazon.com Inc. also have asked banks
to share data if they join with them, in order to provide basic
banking services on applications such as Google Assistant and
Alexa, according to people familiar with the conversations.
"Like many online companies, we routinely talk to financial
institutions about how we can improve people's commerce
experiences, like enabling better customer service," Ms. Diana
said. "An essential part of these efforts is keeping people's
information safe and secure."
Facebook has taken a harder public line on privacy since the
Cambridge Analytica uproar. A product privacy team has launched new
features such as "clear history," which allows users to prevent the
service from collecting their off-Facebook browsing details. It
also is making efforts to alert users to its privacy settings.
That hasn't assuaged concerns about Facebook's privacy
practices. Bank executives are worried about the breadth of
information being sought, even if it means not being available on
certain platforms that their customers use. Bank customers would
need to opt-in to the proposed Facebook services or what other
privacy protections might be offered, the company said in a
statement Monday.
JPMorgan isn't "sharing our customers' off-platform transaction
data with these platforms, and have had to say no to some things as
a result, " said spokeswoman Trish Wexler.
Banks view mobile commerce as one of their biggest
opportunities, but are still running behind technology firms such
as PayPal Holdings Inc. and Square Inc. Customers have moved
slowly, too; many Americans still prefer using their cards, along
with cash and checks.
In an effort to compete with PayPal's Venmo, a group of large
banks last year connected their smartphone apps to money-transfer
network Zelle. Results are mixed so far: While usage has risen,
many banks still aren't on the platform.
In recent years, Facebook has tried to transform Messenger into
a hub for customer service and commerce, in keeping with a broader
trend among mobile messaging services.
A partnership with American Express Co. allows Facebook users to
contact the card company's representatives. Last year, Facebook
struck a deal with PayPal that allows users to send money through
Messenger. Mastercard Inc. cardholders can place online orders with
certain merchants through Messenger using the card company's
Masterpass digital wallet. (A Mastercard spokesman said Facebook
doesn't see card information.)
--Douglas MacMillan and Laura Stevens contributed to this
article.
Write to Emily Glazer at emily.glazer@wsj.com, Deepa Seetharaman
at Deepa.Seetharaman@wsj.com and AnnaMaria Andriotis at
annamaria.andriotis@wsj.com
(END) Dow Jones Newswires
August 06, 2018 13:50 ET (17:50 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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