Social media apps could be a key growth area within digital payments. Photo: Chris Ratcliffe
Payments business Fastacash is predicting a multibillion-dollar boom in money transfers between people via social media apps such as Facebook and WhatsApp, as it eyes a potential Australian listing.
The Singapore-based firm, reported to be planning a float on the ASX, is one of several companies targeting the potential for consumers to use social media apps to send money, as well as pictures or videos, to friends or family.
Chairman and chief executive Vince Tallent said in an interview that Australia was an important potential market for remittance payments via social media, especially among foreign students or migrants from Asia sending money to their families.
The business is betting that since many of these people already use social media to communicate, they will also want to transfer money to friends, family or businesses over social apps.
It partners with banks to allow users to make such transfers via more than 20 social media apps, although it has not yet signed a deal with an Australian bank.
About $16 billion a year in remittance payment is sent from Australia, with payments to China, India, Lebanon and Vietnam topping the list. The remittance market globally is worth more than $US600 billion ($790 million).
Mr Tallent said he believed 1 per cent, or about $US6 billion, of this would move to social media platforms, but most banks were not approaching the trend properly.
There would be a "very very strong" correlation between people communicating with their families through social media and sending money home, he said.
"If you look at Australia, there are billions of dollars moving out of Australia into markets like China, India, Vietnam, and the Philippines. And all those people who are sending money back home, I guarantee you they are communication through social [media]," he said.
Fastacash is not yet making profits, but The Australian Financial Review's Street Talk column has reported it is seeking to raise about $40 million, with a valuation of about $120 million. It is understood Mr Tallent will meet investors over coming weeks.
Mr Tallent would not comment on the reported float plans, but he did say Australian investors were putting a high priority on technology, and acknowledged the government's focus on "fintech".
Social media giant Facebook last week said it was looking to partner with big Australian banks, and the platform could play a role in further boosting the strong growth in mobile banking.
However, the local banks' experience with merging banking and social media apps has so far been mixed.
The Commonwealth Bank previously offered the ability to make payments via Facebook through its app Kaching, which has since been axed.
CBA removed the ability to make payments via Facebook because it said customers preferred to make payments via the bank's own app or its website.
Even so, Mr Tallent argued it was crucial to allow consumers to send money over a range of social-media platforms, not just one, as CBA did with Facebook.
"What's really important to understand here is giving people a Facebook ID is not social payments," he said.
"If I can just go into WhatsApp and touch one button and send you a photo or a video, that's the type experience we want to replicate within a financial app."
The banks with which Fastacash now works are DBS in Singapore, Axis Bank in India and Techombank in Vietnam, and India is the company's biggest market.