Not only did this outage reveal how much the world relies on the social media giant, but also the vulnerability of such giant techs. So, how did we get here and more interestingly, will facebook’s fintech ambitions sustain heavy damage?
Not only did this outage reveal how much the world relies on the social media giant, but also the vulnerability of such giant techs. So, how did we get here and more interestingly, will facebook’s fintech ambitions sustain heavy damage?
Now, what a lot people seem to overlook is the negative impact this left on small merchants.
How? You ask... Well, as small merchants took the eCommerce route during the pandemic, many relied on Facebook’s eCommerce platform to advertise, receive payments and connect with their customers. But unfortunately, in the wake of this outage, small businesses lost up to $5,000 in sales, and understandably, moving forward they plan to reduce their reliance on Facebook’s platforms.
There is no denying that payments became an integral part of merchants' strategies and operations, therefore, we believe that it should be a no-brainer that organizations always have a solid backup-plan in case something goes wrong with their current payments process.
What do we learn from this?
Relying on a single platform for your payments is a very risky business.
Moving forward, merchants can mitigate this risk by working with multiple PSPs and acquirers. Along with a variety of advantages, doing so will allow you to continue running your business with minimal impact in the event that your main payments platform shuts down.
As you probably already know, Facebook has massive plans to enter the FinTech space and provide financial services to its users. But understandably, many are starting to question whether this will ever be a success given the recent events.
While Facebook’s outage will leave a negative impact on the brand, we think that this event will eventually blow over and Facebook will work hard to earn back the trust of its users while it delays the roll out of its newest FinTech solutions.
Regulation will inevitably step in to protect SMEs and consumers who are vulnerable to similar incidents.
Finally, if this news has taught us anything, it is that every tech company, no matter how big or how secure, is prone to vulnerability, and a smart business would always be prepared with a back up plan.
Do you think that this will seriously affect Facebook’s fintech products in the long term?
As competition in the payments ecosystem is riling up between traditional and challenger banks, reshaping core systems and technologies of traditional banking is long overdue. When talking about future-proofing banks and financial services, the term Banking-as-a-service is starting to come up a lot. But what is banking as a service all about and how is it reshaping the industry?
Apple’s push to secure a spot in the payments ecosystem is still going strong. Or at least that’s the plan — executing on it may be … well, not that simple. This is because Apple has been making moves to build a network of merchants, among the most critical components of the payment value chain … with functionalities that are already out there in the market.
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