By Mark Bergen and Christopher Palmeri for Business Day 

A backlash against Apple and Google app stores is gaining steam, with a growing number of companies saying the tech giants are collecting too high a tax for connecting consumers to developers’ wares.

Netflix and video game makers Epic Games and Valve are among companies that have recently tried to usurp the app stores or complained about the cost of the tolls Apple and Google charge.

Grumbling about app store economics isn’t new. But the number of complaints, combined with new ways of reaching users, regulatory scrutiny and competitive pressure are threatening to undermine what have become digital gold mines for Apple and Google.

“It feels like something bubbling up here,” said Ben Schachter, an analyst at Macquarie. “The dollars are just getting so big. They just don’t want to be paying Apple and Google billions.”

Apple and Google launched their app stores in 2008, and they soon grew into powerful marketplaces that matched the creations of millions of independent developers will billions of smartphone users. In exchange, the companies take up to 30% of the money consumers pay developers.

For most of the decade, the companies won praise for helping build an app economy that’s projected to grow to $157bn in 2022, from $82bn last year. But more recently, smartphones and apps have become so important for reaching customers that these app stores have been criticised for taking too big a share of the spoils. Rather than supporting innovation, Apple and Google are being talked about as tax collectors inhibiting the flow of dollars between creators and consumers.

“They’re very aggressive about making sure companies aren’t trying to work around their billing,” said Alex Austin, co-founder of mobile company Branch. “They have whole teams reviewing these flows to ensure they get their tax.”

Last week, Schachter co-authored a report arguing that current app store fees were unsustainable. Apple and Google take 30% of subscription dollars and in-app purchases made on iPhones and Android phones using Google’s app store (effectively all those outside China). About two years ago, the companies lowered that cut to 15% in some cases.

If app store commissions fell to a blended rate of 5% to 15%, it would knock up to 21% off Apple’s earnings, before interest and tax, by fiscal 2020, Macquarie estimated. Google could lose up to 20% by the same measure, according to the brokerage firm. The technology giants are expected to earn more than $50bn each, before interest and tax, in 2020, according to analyst forecast data compiled by Bloomberg.

This is particularly worrying for Apple investors, who are expecting the App Store to support the growth of the company’s services business. Apple often highlights the financial success of its App Store on conference calls with analysts.

Alphabet’s Google is susceptible given its legal problems. A recent EU anti-trust ruling requires the company to stop automatically installing its app store on Android phones in Europe. (Google is fighting the charges.) This may compel more app makers to circumvent Google, luring in customers through the web or through partnerships with other companies. “Around the world, everyone is looking for ways to push back against American tech,” Schachter said. “This feels like a natural way to go about it.”

Complaints about app store taxes became louder in 2015 as Apple and Google waded deeper into the digital content business, making them rivals, not just digital distribution partners. In 2015, music streaming company Spotify began e-mailing customers saying that they should cancel subscriptions purchased through Apple’s app store.

On Tuesday, video streaming company Netflix said it’s testing a way to bypass Apple in-app subscriptions by sending users to its own website. Currently, Netflix users on iPads and iPhones can subscribe via the App Store’s in-app purchasing system. This makes subscribing simpler, but also gives Apple a 15% cut of those subscriptions. And as of May, Google Play billing for Netflix was unavailable to new or rejoining customers, according to Netflix’s website.

On iPhones in the US, Netflix was the number one entertainment app by consumer spend and the most downloaded entertainment app on the Google Play store over the last 90 days, according to App Annie, which tracks the industry.

The video game industry has also worked to avoid app store taxes this year. Valve’s Steam, the largest distributor of video games for PCs, planned to release a free iPhone app that let gamers keep playing while away from their computers. Apple blocked the app. Soon after, the tech giant updated its app review guidelines to ban anything that looks like an app store within an app or gives users the ability to “browse, select, or purchase software not already owned or licensed by the user”, according to Reuters.

More recently, Epic Games, the maker of hit video game Fortnite, opted to ditch Google’s app store. Epic executive Tim Sweeney said the 30% app store fee is a “high cost” in a world where publishers must bear the expense of developing, operating and supporting their games. “Middlemen distributors are no longer required.”

Fortnite has grossed $200m on the Apple App Store since its release there in March, according to Sensor Tower, which tracks app purchases. Apple could make as much as $135m in fees from the title, Sensor Tower estimates, while Google misses out on at least $50m.

How shopping is changing in a digital world

Shopping: love it or loathe it, a wave of innovation is heading this way – and it promises to make a visit to your local mall a far more productive and pleasant experience.

Deloitte is at the forefront of this trend with the creation of a Connected Retail Experience at its Deloitte Greenhouse innovation hub in Cape Town.

Shorter queues at checkout, a much better selection of goods, personalised, relevant special offers and the ability to have out-of-stock items delivered to your door within 24 hours. These are just a sample of the innovations coming to the South African retail sector that promise to make your shopping experience a whole lot more enjoyable and engaging.

That’s according to Corniel van Niekerk, senior manager at Deloitte, the professional services firm which is emerging as one of the key players bringing what’s known as ‘Connected Retail’ to South Africa.

“It’s an exciting time for consumers and retailers alike. Connected Retail technologies will not only make for a vastly improved shopping experience for customers, but retailers and suppliers who embrace and implement them effectively will see a significant boost to their bottom line. In this sense it’s a genuine win-win situation,” says Corniel.

So how could such a Connected Retail experience play out for you as a shopper? It may begin well before a visit to the store with an email, instant message or app notification about a product you’re actually interested in, rather than annoying spam about stuff with no relevance to you.

You may, for example, have a dinner party coming up at the weekend and get a discount voucher on a hard-to-find ingredient for that recipe you bookmarked in the store’s smartphone app last week which has now come into season and just arrived at the store.

Once you go to the store, the personalised experience continues. After you put the ingredients for that recipe into your basket and approach the wine section, you get a notification alerting you to a Pinot Noir that’s not only on promotion but will pair perfectly with the wild mushroom risotto you’ve planning to serve your guests.

Another innovation called ‘endless aisles’ will allow you to buy items currently out of stock or not usually stocked at the store, like a garment or shoes in a less common size or colour, and have it delivered to your home within a day or two.

And leaving with your purchases promises to be a more streamlined affair thanks to technology that lets stores better monitor customer flows and allocate staff to till points more quickly when demand increases – one element of the Connected Workforce which will empower and incentivise staff with technologies like gamification.

Self-service checkouts – which are currently being trialled by a major retailer at one of its Cape Town stores – promise, if properly implemented, to make for another quicker and easier checkout option for customers.

“The coming Connected Retail revolution will combine the best aspects of the online and bricks and mortar shopping experience, making for happier, more loyal customers who spend more at the store,” says Corniel.

But for this to happen will require looking beyond the Connected Customer, Connected Store and Connected Workforce, and bringing a series of technologies and innovations to the entire retail value chain.

The Connected Supplier will use embedded sensors and advanced analytics to prevent unscheduled asset downtime, increase labour productivity and synchronise or integrate activities, while the Connected Supply Chain will employ advanced computational techniques to forecast disruptions, reduce shortages, optimise warehouse collection and delivery slots and pro-actively manage advanced chains to reduce waste and theft.

Digitalisation and the store of the future have been topics of discussion in various forums, but at Deloitte, we believe it’s now time to make the concept real for the clients in our market and link business value to practical solutions,” says Corniel.

To this end, the firm recently strengthened its South African retail team with the addition of a number of individuals with extensive expertise in the international and domestic retail sectors.

It has also established a physical Connected Retail Experience at its Deloitte Greenhouse innovation hub in Cape Town. This immersive, interactive experience allows visitors to gain practical, tangible insights into every aspect of the Connected Retail ecosystem, sampling proven solutions alongside brand new technology relevant to each of the touch points: consumer, store, workforce, supplier and supply chain.

“It’s part of Deloitte’s new focus on ‘show not tell’ and we’re confident it will give our retail sector clients a significant advantage over their competitors as they position themselves to avoid the pitfalls and capitalise on the enormous opportunities offered by the Connected Retail wave,” concludes Corniel.

By Giovanni Buttarelli for The Washington Post 

First came the scaremongering. Then came the strong-arming. After being contested in arguably the biggest lobbying exercise in the history of the European Union, the General Data Protection Regulation became fully applicable at the end of May.

Since its passage, there have been great efforts at compliance, which regulators recognize. At the same time, unfortunately, consumers have felt nudged or bullied by companies into agreeing to business as usual. This would appear to violate the spirit, if not the letter, of the new law.

The GDPR aims to redress the startling imbalance of power between big tech and the consumer, giving people more control over their data and making big companies accountable for what they do with it. It replaces the 1995 Data Protection Directive, which required national legislation in each of the 28 E.U. countries in order to be implemented. And it offers people and businesses a single rulebook for the biggest data privacy questions. Tech titans now have a single point of contact instead of 28.

The new regulation, like the old directive, requires all personal data processing to be “lawful and fair.” To process data lawfully, companies need to identify the most appropriate basis for doing so. The most common method is to obtain the freely given and informed consent of the person to whom the data relates. A business can also have a “legitimate interest” to use data in the service of its aims as a business, as long as it doesn’t unduly impinge on the rights and interests of the individual. Take, for example, a pizza shop that processes your personal information, such as your home address, in order to deliver your order. It may be considered to have a legitimate interest to maintain your details for a reasonable period of time afterward in order to send you information about its services. It isn’t violating your rights, just pursing its business interests. What the pizza shop cannot do is then offer its clients’ data to the juice shop next door without going back and requesting consent.

A third aspect of lawfully processing data pertains to contracts between a company and client. When you purchase an item online, for example, you enter into a contract. But in order for the business to fulfill that contract and send you your goods, you must offer credit card details and a delivery address. In this scenario, the business may also legitimately store your data, depending on the terms of that limited business-client relationship.

But under the GDPR, a contract cannot be used to obtain consent. Some major companies seem to be relying on take-it-or-leave-it contracts to justify their sweeping data practices. Witness the hundreds of messages telling us we cannot continue to use a service unless we agree to the data use policy. We’ve all faced the pop-up window that gives us the option of clicking a brightly colored button to simply accept the terms, with the “manage settings” or “read more” section often greyed-out. One of the big questions is the extent to which a company can justify collecting and using massive amounts of information in order to offer a “free” service.

Under E.U. law, a contractual term may be unfair if it “causes a significant imbalance in the parties’ rights and obligations arising under the contract that are to the detriment of the consumer.” The E.U. is seeking to prevent people from being cajoled into “consenting” to unfair contracts and accepting surveillance in exchange for a service. What’s more, a company is generally prohibited to process, without the “explicit consent” of the individual, sensitive types of information that may reveal race or political, religious, genetic and biometric data.

Indeed, regulators are being asked to determine whether disclosing so much data is even necessary for the provision of services — whether it is ecommerce, search or social media. One key principle to remember is that asking for an individual’s consent should be regarded as an unusual request, given that asking for consent often signals that a party wants to do something with personal data that the individual may not be comfortable with or might not reasonably expect. Thus, it should be a duty of customer care for a company to check back with users or patrons honestly, transparently and respectfully. As the Facebook/Cambridge Analytica scandal revealed, allowing an outside company to collect personal data was not the type of service that users would have reasonably expected. Clearly, abuse has become the norm. The aim of the EU data protection agency that I lead is to stop it.

Independent E.U. enforcement authorities — at least one in each E.U. member state — are already investigating 30 cases of such alleged violations, including those lodged by the activist group NOYB (“none of your business”). The public will see the first results before the end of the year. Regulators will use the full range of their enforcement powers to address abuses, including issuing fines.

The GDPR is not perfect, but it passed into law with an extraordinary consensus across the political spectrum, belying the increasingly fractious politics of our times. As of June, there were 126 countries around the world with modern data protection laws broadly modeled on the European approach. This month, Brazil is next. And it will the biggest country to date to adopt such laws. It is likely to be followed by Pakistan and India, both of which recently published draft laws.

But if the latest effort is a reliable precedent, data protection reform comes around every two decades or so — several lifetimes in terms of the pace of technological change. We still need to finish the job with the ePrivacy Regulation still under negotiation, which would stop companies snooping on private communications and require — again — genuine consent to use metadata about who you talk to as well as when and where.

I am nevertheless already thinking about the post-GDPR future: a manifesto for the effective de-bureaucratizing and safeguarding of peoples’ digital selves. It would include a consensus among developers, companies and governments on the ethics of the underlying decisions in the application of digital technology. Devices and programming would be geared by default to safeguard people’s privacy and freedom. Today’s overcentralized Internet would be de-concentrated, as advocated by Tim Berners-Lee, who first invented the Internet, with a fairer allocation of the digital dividend and with the control of information handed back to individuals from big tech and the state.

This is a long-term project. But nothing could be more urgent as the digital world develops ever more rapidly.

Government’s entire IT system goes down

By Gaye Davis for EWN 

It has emerged that not only Home Affairs but IT systems across government were affected by Friday’s power outage.

The head of the State Information Technology Agency (Sita) has told Parliament that the power outage that caused Home Affairs’ systems to shutdown triggered a “catastrophic event” that affected all of government.

Sita CEO Dr Setumo Mohapi and the Department of Home Affairs have been called to Parliament to explain what went wrong.

Mohapi has painted a worrying picture of system and communication failures.

Sita’s generator kicked in when power from Tshwane municipality failed at 2am but its fuel pump burned out for reasons that are as yet unclear.

An overloaded UPS battery system then went into distress and systems had to be shut down at Home Affairs as well as government’s entire IT plant.

Mohapi on Tuesday explained: “It was a catastrophic event that affected not just Home Affairs but the entire IT system of government.”

Mohapi’s apologised for what happened, including a second power outage that took place on Monday, when Home Affairs systems were again down for around 90 minutes.

Mohapi says he wasn’t informed until hours after the power outage. Home Affairs’ acting Director-General Thulani Mavuso says they also had no early warning, leading to their systems crashing rather than being properly shut down.

By Veronica An for The Hub

Despite being known as the digital generation, tech-obsessed millennials are spending more money on handmade cards and letterpress stationery.

“Everyone says that paper is dying but our experience is that paper is not dying,” said Rosanna Kvernmo, who runs Iron Curtain Press and the adjacent stationery store, Shorthand, in Highland Park.

According to a report by Paper Culture, the average number of holiday cards purchased by customers has actually increased by 38 percent over the last five years.

“I don’t think this is just a flash in the pan,” Kvernmo said. “I think stationery is here to stay.”

Stationery makers and letter pressers agree that millennials are some of their biggest consumers.

“I interface with people a lot and, yes, I can say that people are sending cards again,” said Elisa Goodman, 62, owner of Curmudgeon Cards. Goodman has an online store and travels to various art fairs and open air markets in Los Angeles to sell her cards.

Goodman has been making her unique brand of handmade cards for 18 years and says her message is one that resonates with millennials as well as Baby Boomers. Goodman started making cards while dealing with a difficult time in her life and said that encouragement cards were among the first she created.

“I’m happy millennials are resonating with my brand so much. They really are appreciative of the quality and not price-resistant to the cost of handmade cards,” Goodman said.

Curmudgeon Cards retail for $10-$12 – about double the cost of digitally printed cards. Goodman sells many of her cards at craft fairs and farmers markets across L.A.

Cost still a factor
Still, other stationery-makers cite price as a sticking point with customers. Letter pressers say that the cost of paper and ink have gone up, not to mention the difficulty of working with machines that are out of production.

Adam Smith, 38, the owner of Life is Funny letterpress, got his start at Sugar Paper letterpress in 2006 and purchased his own press, a 1953 Heidelberg Windmill, in 2013. He said his cards retail at comparable prices to digitally printed cards which make them more affordable than most.

“One of my biggest clients is Alfred Coffee so the people who are buying these cards are who you’d expect …millennials with money,” Smith said.

According to customers, Smith’s sarcastic cards appeal to millennials. One card under the “Love” category tagged as #FirstDateWarnings says “I Use A Lot Of Emojis…I Hope You’re Okay With That.”

In addition to letter presses that have opened recently, older L.A.-based companies are also seeing an increase in business. Aardvark Letterpress, a family-owned letterpress in MacArthur Park, celebrated its 50th year in 2018 and owners say that not much has changed in terms of production.

“People are rediscovering [letterpress] and coming back to us…but the economic factors are still an issue,” said Cary Ocon, co-owner of Aardvark Letterpress.

Ocon said the company saw a drop in sales during and after the 2008 recession but that they are currently doing well. Although sales have not quite surpassed pre-recession numbers, Ocon said Aardvark still does solid business with many celebrities, entertainment companies, and governmental organizations, including the mayor’s office.

“I think there’s this reaction to the temporary nature of stuff – most things aren’t even printed anymore, they’re just read and shared digitally,” Ocon said. “I think people realize that this is a whole different product…so much more work goes into it than digital printing.”

Unique feel
Customers at Aardvark agree, saying that they are willing to pay extra for the uniqueness of letterpress.

“The presentation is everything,” said Darius Washington, founder of the D Hollywood Agency.

Washington was shopping for letterpress and foil printed business cards for his clients and said he had heard about Aardvark Letterpress through Instagram.

“Letterpress has that special feel to it. It’s like old cars, there’s something special about the handcrafted effort,” Washington said.

The handcrafted nature makes letterpress and handmade cards ideal for customization.

According to Entrepreneur Magazine and a report by Forbes, customization is a major selling point for millennials.

Specialization works for Goodman, who said she accepts many commissions for Curmudgeon Cards and Aardvark Letterpress has an in-house designer who can make custom designers for clients.

“People want to connect,” Kvernmo said. “There’s something about connecting with paper that’s more special than connecting through text.”

Moya Messenger is a new mobile messaging app that allows users to communicate without incurring data costs.

The app, developed in South Africa by biNu and released in July, provides #datafree text messaging that works when a mobile user has no airtime or data balance on their smartphone device.

The Moya app provides a similar messaging experience to market leader WhatsApp, but with the distinguishing feature that text messaging is #datafree across all four major mobile networks.

“We are profoundly motivated by the positive social impact of enabling ubiquitous #datafree mobile messaging, developed in Africa, for Africans,” says Gour Lentell, CEO of biNu. “We do it by utilising telco reverse billing, which allows us to pay mobile messaging data costs.”

biNu has reverse billing agreements with MTN, Vodacom, Cell C and Telkom, and has built a technology platform that enables partners and customers to make their apps and websites #datafree for end-users.

Lentell adds, “Despite a multi-million dollar marketing budget, WeChat struggled to gain a foothold in the South African market largely because the incumbent network effect of WhatsApp proved too competitive to overcome.”

“But we definitely see a place for a challenger like Moya, where the data cost barrier of mobile messaging is removed completely for South African consumers, particularly in an era of #DataMustFall and an increased amount of pressure on consumer incomes,” Lentell says.

Moya functionality

Moya Messenger was built using open-source messaging technology and was adapted to be #datafree.

The app offers unlimited texting, group chat, security with automatic encryption of messages, and automatic contact discovery that allows users to connect with others also using the Moya app.

However, while message attachments like photos, videos, voice notes, documents and the like are fully supported, sending media attachments is not #datafree. Moya users will be pre-emptively warned when they will incur mobile data costs or need to switch to Wi-Fi to send media files.

According to Moya, the commercial model around the platform is to provide rich, programmatic access to businesses and enterprises of all kinds so users can engage at scale with their audiences through messaging, without a cost implication for their users, members and customers.

“We see opportunities for organisations to benefit from a #datafree platform. For example, financial institutions can deliver on customer support and document exchange; trade unions and political parties can communicate with their members; government agencies can disseminate information and implement service delivery; NGOs can reach target communities; and the FMCG sector can reach their audiences,” Lentell says.

The key feature that sets Moya apart is that sending and receiving messages from businesses or other enterprises remains #datafree for the end-user.

“It’s counter-productive for organisations to try and engage their customers and mobile audiences on other messaging platforms when they have no airtime available,” adds Lentell.

A core standard that will be applied rigorously to Moya is that all business communication will be on a consumer opt-in basis only.

Moya Messenger can be downloaded via the www.datafree.co.za website or the Google Play Store.

Source: MyBroadband

MWEB and Absa clients have been targeted in a new e-mail phishing attack, where they are asked to open an attachment aimed at stealing their private information.

The email asks users to open an HTML attachment, which in turn opens a form in a browser which steals the victim’s personal details.

In the past, executable keyloggers were attached to emails to steal account information from victims.

However, most security services now block users from opening an attached executable file, as most of these files are malicious.

Scammers are now using HTML pages as attachments, where users are asked to provide their personal details in what appears to be a legitimate website.

In these scams, users are encouraged to open the attached email file, which opens in a browser and requests their username and password for a service.

This information is then sent to the criminal’s email address using a basic PHP script.

MWEB and Absa scam email
This is the method used in the latest email scam which is targeting MWEB and Absa clients.

The email, which claims to come from MWEB – but is sent from “info@mailsynk.co.za” – tells users that their “invoices and/or receipts and statement that you requested attached to this email”.

The attachment is the phishing page, which in this case uses the domain “jehovalchristofficeinternatona.co.za” to host the scripts.

Without looking at the HTML code, there are many warning signs that this is a scam email:

  • The email does not come from MWEB or Absa. It should be noted that an email which comes from an @mweb.co.za or @absa.co.za does not automatically mean it is authentic.
  • The email is poorly structured and contains poor grammar.
  • There is no personalisation in the email, with a user’s name or account details.
  • It mentions a PDF file, but the attachment is a .htm file.
  • Users are asked to provide their personal details to view a file – a clear sign it is a phishing attack.

By Tom Head for The South African 

A study released by Ipsos this year cites citizens of Mzansi as the most ignorant in the world. We came out on top of the “Misperceptions Index” – a table which charts the 38 nations surveyed about the biggest concerns in their country. South Africans are seen as being the most ignorant of the lot, after a series of questions found that we tend to overestimate and misunderstand certain issues.

The dictionary definition of “ignorant” is what’s being applied here – meaning to have “a general lack of awareness or knowledge”. This study doesn’t imply that South Africans are rude or crass.

What makes South Africans ‘ignorant’?
Of the 10 social issues analysed, South African perceptions are the worst in the following areas:

Murder rate

85% of people in South Africa believe the murder rate is higher than it actually is. Predictions averaged to be 29% higher than the actual figures.

Foreign-born prisoners

This sample size of South Africans believe that 50% of prisoners are foreigners, when in fact, that number is below 20%.

Teenage pregnancy

South Africa ranks as highly as several Latin American countries when it comes to guessing the teenage pregnancy rate. Our participants incorrectly guessed that 44% of 15-19-year-olds are having children, whereas the actual figure is 4.4%.

Most ignorant countries ranked by Ipsos
The South Africans surveyed by Ipsos tend to overestimate these figures rather than anything else. The only perception where they fell short was related to religious beliefs. In general, it was thought that 67% of our countrymen and women believe in heaven – that figure is actually up at 84%.

Brazil, The Philippines, Peru and India make up the top five “ignorant” countries. The three least ignorant countries were all Scandinavian – Sweden came out on top, with Norway and Denmark emerging as the second and third most perspective countries respectively.

Naspers takes a hit as Tencent stocks tumble

By Kana Nishizawa and Jeanny Yu for Business Day

If you thought the slump in US technology stocks was bad, take a look at Tencent, the Chinese internet giant 31% owned by JSE-listed Naspers.

Tencent has tumbled 25% from its January peak, erasing about $140bn of market value. That is the biggest wipeout of shareholder wealth worldwide, as measured from the date of each stock’s 52-week high. Facebook, the F in the FANG block of mega-cap US tech stocks, is the second-biggest loser, with a $136bn slump over the past three trading sessions.

Investors around the world are beginning to question whether the best days are over for technology stocks — the undisputed leaders of a nine-year boom in global equities. Tencent, Asia’s second-largest company after e-commerce behemoth Alibaba, has also been dogged by concern that growth in its mobile-gaming unit is slowing. The stock, down 9.5% in July, is poised for its biggest monthly retreat since 2014.

“Investors are increasingly pricing in lower expectations for Tencent’s interim results,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. “Overall, tech companies are facing a similar problem. They have been enjoying fast profit growth in the past few years, so it will be difficult for them to maintain similar growth in the future as the competition grows and some segments are saturated.”

Tencent’s year-on-year profit growth probably slowed to 5.1% in the second quarter, the weakest pace since 2012, according to analyst estimates compiled by Bloomberg before the company releases results on August 15. At least 11 brokerages cut their Tencent share-price target in July, including Credit Suisse Group and Morgan Stanley.

Still, analysts have not turned bearish: all 51 forecasters tracked by Bloomberg have a buy recommendation on Tencent shares, with the average price target implying a 44% gain over the next 12 months.

By Emily Glazer, Deepa Seetharaman and AnnaMaria Andriotis for Wall Street Journal 

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 JPM 0.37% & Co., Wells Fargo & Co., Citigroup Inc. C 0.01% and U.S. Bancorp USB 0.70% to discuss potential offerings it could host for bank customers on Facebook Messenger, people familiar with the matter said.

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, said 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 the 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,” spokeswoman Elisabeth Diana said. “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 Monday on the news, rising 4.45%, marking the biggest one-day 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 their 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.

Facebook has taken a harder public line on privacy since the Cambridge Analytica uproar. A product privacy team has announced new features such as “clear history,” which would allow 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 over Facebook’s privacy practices. Bank executives are worried about the breadth of information being sought, even if it means their bank might not being available on certain platforms their customers use. Bank customers would need to opt-in to the proposed Facebook services, 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,” spokeswoman Trish Wexler said.

Banks view mobile commerce as one of their biggest opportunities but are still running behind technology firms such as PayPal Holdings Inc. PYPL 0.62% and Square Inc. Customers have moved slowly, too; many Americans still prefer using credit or debit 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. AXP 1.04% allows Facebook users to contact the card company’s representatives. Last year, Facebook struck a deal with PayPal that allows users of that payment service to send money through Messenger. And Mastercard Inc. MA 0.54% 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 the card users’ information.)

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