The Facebook Tax

Bankers, you have a problem and it is called Facebook.

Allow me to present this vision of the not-too-distant future: Bankers work out the security challenges of transacting within Facebook. The 500 million active Facebook users realize it is far easier to top up their debit cards via Facebook than trudging over to an ATM for tired old cash or click and validate over to their bank’s clumsy online banking platform to exercise a bill payment. The dollar value of the banking transactions on Facebook start climbing: from a few billion dollars to several billions to trillions. Our good friend Marc Zuckerberg, like any respectable landlord, takes notice of the value of his property to banks and announces that he’ll take a point off every banking transaction, thank you very much. Or maybe he’ll be greedy like American Express and take three and a half points. And the bankers will pay it, because they have no choice — just as merchants have no choice but to pay American Express. Call it the Facebook Tax.

The only way out of the Facebook Tax is for Facebook to implode MySpace-style. And even then, if it is not Facebook.com, it will be some domain other than BankXYZ.com that will command a tax for facilitating a financial transaction on its site. Perhaps every messaging platform will demand a tax: Gmail, Yahoo, Hotmail, etc. Intuit is particularly well-positioned to command this tax.

As financial transactions move from bank domains, banks will increasing be at the mercy of others. Will this be a debilitating tax? No, but it will hurt the bottom line, and it will be imminently traceable to the screw-the-customer attitude banks have shown for the last 10 years by absolutely shunning all forms of interoperability. The Facebook Tax will be payback for all those years of benign neglect, for restraining the abilities of consumers to make choices. And Marc Zuckerberg will be happier than ever.