Frictionless mobile payments may not be as good as cash for paying bribes and buying contraband, but they’re the next best thing.
The New York Times published a report last week exposing the scale of weapons being trafficked through Facebook groups into Libya, Yemen, Iraq, and Syria.
According to the the report, 6,000 arms transactions have been documented with weapons including handguns, machine guns, grenades, and rocket launchers.
Arms dealers were advertising their goods in private Facebook groups, and taking orders and payment through Facebook’s Messenger app.
Messenger has a payments feature that allows users to send money to each other instantly, without transactions fees or sending limits.
Using Facebook to qualify sales leads, identify government officials, and communicate with customers is on the rise, and for good reason. Facebook is one of the best communication and marketing tools in history.
However, the thought of anyone being able to send their Facebook friends money directly, without having to travel or verify their information through the receiving bank, is a sobering one.
Facebook Messenger currently has 900 million monthly active users.
Facebook isn’t the only one. Users can send money through nearly every chat app, including WhatsApp, Line, WeChat, and others.
WeChat even offers a special payment system for Red Packets during Chinese New Year. During the 2016 Chinese New Year celebrations, 8 billion Red Packets were sent digitally through WeChat alone.
Payment apps don’t operate outside financial regulations and the app makers work hard to stay compliant. But the system they produced makes it easier for everyone to get paid.
Eliminating transaction fees means a $10,000 payment can be broken up into dozens of smaller, non-identical payments with no financial penalty to the sender or receiver. Structuring, as it’s called, is a breeze.
All this brings a new meaning to “Facebook Friend.”
Harry Cassin is the CEO of Recathlon LLC, owner of the FCPA Blog and other publications. He can be contacted here.
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