Thursday, July 4th, 2013

Social Data Will not Replace FICO, but Will Improve Credit Scoring

Tags: credit score, social media

Social Data Will not Replace FICO, but Will Improve Credit Scoring

Recently, [email protected] posted a wide-ranging piece on the trendy issue of using social data for measuring potential borrowers’ creditworthiness. In it, the author skims over the offerings of three start-ups — Lenddo, Neo Finance and Affirm — which “hope to exploit a perceived shortcoming in traditional loan criteria based on FICO credit scores”. And whereas the author acknowledges that “incorporating social data for credit-scoring purposes is perhaps inevitable”, his / her skepticism is nevertheless palpable. Well, I think that the author’s skepticism is misplaced.

The main obstacles to using social data for credit-scoring purposes, as identified in the article, are privacy issues in relation to data collection, lenders’ reluctance to switch to a new metric when a perfectly well-functioning one (FICO) already exists and the potential for manipulating social signals. However, none of these arguments stands to scrutiny. Let’s examine them one at a time.


Here is how [email protected] frames the privacy issue:

Privacy is another issue. Last year, Germany’s largest credit agency, Schufa, sparked an outcry after several news outlets reported that it was planning to scrape data from social networks to gauge a consumer’s creditworthiness. It has since backed down. In the U.S., credit agencies are “tightly regulated,” Musto says. “They’re very careful to comply with the law…. I can’t see any of the big credit agencies getting into something like this.” At least one major lender, Citibank, does not see itself using social data to assess borrowers. Frank Eliason, head of social media for the company, told The Economist that the bank monitors social media for marketing but to use it to measure creditworthiness is a “dangerous game.”

Well, of course anyone who decides to do a wholesale scraping of people’s social profiles, for whatever purposes, is bound to hit a wall of resistance, both of the popular and regulatory kind. But the failure of one start-up to realize that fact does not invalidate the whole concept and plenty of other start-ups have been able to easily get around the privacy hurdle. How have they achieved that feat? Why, they have asked for permission. In fact, even one of the start-ups that are mentioned in the article — Neo — does precisely that. Neo’s software helps car-loan lenders determine whether or not an applicant’s claimed jobs are real by looking, with permission, at the number and nature of his / her LinkedIn connections to co-workers.

Similarly, Kreditech, a Hamburg-based start-up that makes small online loans asks applicants to provide a limited-time access to their account on Facebook or another social network on the assumption that much is revealed by one’s friends.

Then there is Finca International, an American microfinance firm which operates in Africa. With permission from potential borrowers, Finca analyses mobile phone usage patterns which it believes can help reveal those most likely to default.

Why Switch to a New Metric When FICO Is Doing a Fine Job?

Here is what [email protected] has to say on the FICO replacement matter:

Then there is the natural reluctance of lenders to switch to a new metric when FICO has worked well. Other companies have introduced new scoring in the past, including the three largest U.S. credit bureaus, but these have been slow to gain ground. Credit start-ups using social data could face the same obstacles. “That’s going to be the hard part — prying customers away from FICO,” Stine notes. Challengers to FICO have to prove “they’re building a better mouse trap.” But companies will continue to try to wrest market share, especially now. “It’s a lucrative market … and the barriers to entry have gotten lower because of technology,” he says. “You don’t have to have a massive computer filling a house in order to do these kinds of things anymore. You can use a cloud server. The algorithms have gotten more sophisticated and do not need as much fine-tuning as they once did.”

Well, the author, or at least his / her sources are missing the whole point of using alternative data for credit-scoring purposes. The main objective is not the replacement of FICO or any other traditional credit-scoring model, but it is to expand on what already exists, so that more people can get access to various forms of financing (although yes, alternative data can and will eventually be used to paint a more complete picture of the creditworthiness of consumers who already have access to traditional lending). For example, the aforementioned Neo’s software is designed to use the information it obtained on LinkedIn (with the applicant’s permission) to calculate how quickly laid-off employees will be able to find a new job by rating their contacts at other employers.

Similarly, Kreditech goes through an applicant’s Facebook network (with permission) and examines the types of jobs held by his / her friends. ?áIf an applicant’s friends appear to have well-paid jobs and live in nice neighborhoods, he / she is deemed more likely to secure a loan and vice versa.

In the case of Finca, the company analyses (with permission) its prospective borrowers’ call patterns. For example, frequent calls to or from a rich country are a plus, as they suggest a connection with someone (possibly a relative) with a higher earning potential. Additionally, calls to a nearby market town are a plus as they suggest commercial activity.

None of the things these start-ups’ are doing are done by traditional credit-scoring providers. And whereas for the majority of loan applicants there are plenty of actionable data already available, these new-age models can be used (indeed, they are designed with that purpose in mind) to get some kind of an idea of the creditworthiness of consumers for whom there simply are not enough data.

Manipulating Social Data

Finally, here is what [email protected] has to say on that issue:

Another problem with social data: Unlike actual payment history, it is easier to manipulate one’s social media profile. “[Consumers] can buy Twitter followers” and attempt to boost their credit scores that way, Stine notes. “At some point, it becomes advantageous to manipulate these things.” It then becomes a face-off between borrowers who manipulate their profiles to get credit and lenders who try to discern truly creditworthy consumers, he adds.

Yes, of course there is plenty of social profile manipulating going on, but the people designing the aforementioned services are perfectly aware of that fact and are building their software to take this type of fraud into account. To begin with, there is a number of free services that purport to be able to calculate the share of fake “friends” or “followers” (Status People immediately comes to mind). So we can reasonably expect that the best providers of alternative data for financial purposes will be able to do better than the free services, right? Well, that is precisely what another start-up mentioned in the [email protected] piece happens to be doing. Lenddo’s software checks Facebook messages for shared slang or wording that suggests affinity among “friends”. And in any case, topics of conversation with fake “followers” are very limited by default and well-designed software should be able to easily identify such fake connections and take them out of the pool of evaluated data.

The Takeaway

Skepticism of the use of social data for the purposes of making financial decisions is fairly widespread, but it is misplaced. Lenders are a notoriously conservative lot and the Lenddos, Kreditechs and Neos of the world are not about to replace FICO in traditional lenders’ toolkits anytime soon. However, these new-age services are already finding some use at similarly new-age lenders in both developed and developing countries. Over time, as these platforms mature and improve their algorithms, they will gradually become accepted by the mainstream lenders, but even then the newcomers will not displace the traditional credit-scoring models, but will be used in addition to them. And I think that will make credit scoring more accurate.

Image credit:

Wednesday, June 19th, 2013

How You Use Facebook May Determine the Interest Rate of Your Next Loan

Tags: social media

How You Use Facebook May Determine the Interest Rate of Your Next Loan’s Kelly Dilworth is skeptical of WePay CEO Bill Clerico’s claim that social media data can be trusted when evaluating a person’s creditworthiness. Social data is too easy to manipulate, Dilworth contends, which makes it unreliable. A “sophisticated scammer”, she writes, would be more than happy to invest the time and effort necessary to build a solid and realistic social media profiles, which could then be used to dupe lenders.

Well, of course social media fraud is rampant — we’ve all seen statistics about the tens of millions of fake Facebook and Twitter accounts, “friends”, “followers”, “likes”, “shares”,”retweets”, etc. These things are still incredibly easy to manipulate and that is likely to remain the case for a long time to come. But I think that Dilworth may be underestimating the ability of data-crunchers to sift through the tons of social media garbage and find what a loan applicant is really about. Moreover, the lenders will keep improving their algorithms and the exponential growth of social media data will make their job easier. Yes, there will always be fraudsters who will be smart enough to find and exploit cracks in the system, but on balance, the use of social data for underwriting purposes will bring value that hugely outweighs the potential risks.

Manipulating Social Data

Dilworth points out how “ridiculously easy” it is to falsify social media data:

According to a 2012 estimate, around 83 million Facebook accounts are fakes. Facebook doesn’t bother to verify the identities of its users before handing out accounts. Neither does Twitter, LinkedIn or Pinterest. And as Bloomberg News points out, if you need friends and followers to quickly boost your status, you can pay for that as well.

You can also just randomly “friend” real people and hope they accept. Or, if you’re really determined, you can create genuine relationships on the Web and scam other users into thinking you are who you say you are. (The former Notre Dame linebacker Manti Te’o certainly isn’t the first person to be duped into believing that someone he or she met online actually exists.)

Moreover, Dilworth continuous, even legitimate “online social connections are tenuous”:

Among the hundreds of Facebook friends that I’ve accumulated since joining the site in 2004, for example, I actually only see about a quarter of them in person. Most are people I went to elementary, high school or college with and some are people I’ve never met.

I think many of us will relate to this statement and so we can understand where Dilworth’s skepticism is coming from:

That’s also why I don’t buy the argument that the company you keep online should somehow help determine how risky you are to lenders. There are just too many different and often shallow reasons why people become friends through networks such as Twitter, LinkedIn or Facebook.

I have also yet to hear a credible reason for why mining someone’s Facebook likes, speech patterns or online community of friends is an effective — and fair — barometer for determining who they are, or whether they’ll lapse on a loan.

Well, understandable though Dilworth’s skepticism may be, there already is plenty of evidence that using social data to determine an applicant’s creditworthiness does indeed work.

I Know What You Did on Facebook

Several months ago, The Economist told us how a couple of start-ups were using social media data to evaluate creditworthiness:

Professional contacts on LinkedIn are especially revealing of an applicant’s “character and capacity” to repay, says Navin Bathija, the founder of Neo, a start-up that assesses the creditworthiness of car-loan applicants. Neo’s software helps determine if applicants’ claimed jobs are real by looking, with permission, at the number and nature of LinkedIn connections to co-workers. It also estimates how quickly laid-off employees will land a new job by rating their contacts at other employers.

Facebook data already inform lending decisions at Kreditech, a Hamburg-based start-up that makes small online loans in Germany, Poland and Spain. Applicants are asked to provide access for a limited time to their account on Facebook or another social network. Much is revealed by your friends, says Alexander Graubner-M??ller, one of the firm?ÇÖs founders. An applicant whose friends appear to have well-paid jobs and live in nice neighbourhoods is more likely to secure a loan. An applicant with a friend who has defaulted on a Kreditech loan is more likely to be rejected.

An online bank that opens in America this month will use Facebook data to adjust account holders’ credit-card interest rates. Based in New York, Movenbank will monitor messages on Facebook and cut interest rates for those who talk up the bank to friends. If any join, the referrer’s interest rate will drop further. Rates and fees will also drop if account holders spend prudently. Efforts to define customers “in a richer, deeper fashion” might eventually include raising rates for heavy gamblers, says Brett King, Movenbank’s founder.

But how do we know how authentic a prospective borrower’s social network is? After all, as Dilworth says, setting up fake accounts is incredibly easy, and getting people to “friend” and “follow” you is not any more difficult (if all else fails, you can always buy them by the thousands for a few dollars). Well, she underestimates just how sophisticated social data mining algorithms already are, even at this fairly early stage. The Economist told us that one start-up, called Lenddo, uses software which checks Facebook messages for shared slang or wording that suggests affinity. Moreover, you are unlikely to have much to talk about with your fake “followers” and “friends”, beyond discussing “who are you?”, “where do you live?” and “what do you do?”, and well-designed software should be able to easily identify such fake connections and take them out of the pool of evaluated data.

The Takeaway

Clerico tells us that using social data to evaluate risk has helped his company prevent fraudulent transactions worth $30 million over the past six months, even as it has simplified and sped up the application process. More than 40 percent of his merchants are automatically approved, without having to disclose their social security numbers. So whatever algorithm WePay is using for sifting through social data, evidently it works. And again, these are still early days for this type of data crunching, so I fully expect that, as it evolves, data-mining software will play an ever more prominent role in evaluating a borrower’s creditworthiness.

Image credit: Wikimedia Commons.

Thursday, February 14th, 2013

Tweet Your Way to Discounted American Express Gift Cards

Tags: American Express, gift cards, social media

Tweet Your Way to Discounted American Express Gift Cards

That is precisely what AmEx is now allowing its cardholders to do, the credit card company is telling us in a press release. In addition to gift cards, American Express now lets you use your Twitter account to buy specially-priced products from several retailers, including Amazon and Sony. The deals are exclusively available on Twitter, the entire sales process is completed in two tweets and your purchase is shipped to you for free.

I really liked AmEx’s Twitter program when it was first launched in March of last year and this latest development makes me like it even better. Back then, AmEx cardholders were asked to send out a promotional tweet about a discount at a participating merchant and in exchange the card issuer allowed them to get the discount they tweeted about. Moreover, these discounts were separate from any regular rewards program that may have been linked to the cardholders’ cards. So it was a really good deal as it was, but this week’s upgrade makes it even better, as we no longer have to send out any promotional tweets and all we have to do is just ask for the discount.

How Does It Work?

In order to take part in American Express’ Twitter program, you need to have an AmEx card and to have linked it to your Twitter account through the card issuer’s Sync service. The purchase itself is a three-step process and here is how it would look like if you were buying the discounted gift card that was the first product to be launched:

  1. Tweet #BuyAmexGiftCard25 to get started. You’ll be prompted by @AmexSync to sync your card for purchases, if you haven’t already.
  2. You will receive a confirmation from @AmexSync. Check your Twitter mentions in the @Connect tab of your account ( for a response from @AmexSync containing a confirmation #hashtag. Tweet this #hashtag within 15 minutes of the response from @AmexSync to confirm your purchase.
  3. Confirm your purchase. Once your purchase is confirmed, your product will be shipped via free 2-day shipping.

Then your American Express credit card will be charged $15 and you will receive a gift card worth $25. Whatever you may think of AmEx’s reasons for wanting to pay you $10 just for sending a tweet, the fact is that they do and I see no reason not to take advantage of it. The full list of #hashtags for the products available for purchase will be featured as “favorites” on the @AmericanExpress Twitter page.

As far as security is concerned, if someone gained access to your Twitter account, he wouldn’t be able to do any damage to your American Express account, even if you had already synced the two. If that were the case and the hacker tweeted one of the promotional hashtags, he might able to complete the transaction, but the delivery would be made to the cardholder’s billing address. At that point you would know that something was wrong, if you hadn’t already figured it out, contact American Express and report the incident. The transaction would be reversed and the product shipped back to the sender. The best thing is that the hacker would not have gained access to your AmEx account information, simply because it was never shared with Twitter.

What’s in It for American Express?

So consumers are getting a pretty good deal out of AmEx’s Twitter program, but what does the card issuer itself get? Now, it would be perfectly all right if you didn’t care much about that, as long as you got your discount, but it’s an interesting question all the same. Moreover, if AmEx judges its program a success, it will probably expand it and you will benefit even more from it.

So I see two separate objectives being pursued here. On the one hand, American Express is testing the possibilities of social media to drive sales and that is what most commentators have focused on. As The Financial Times’ Richard Waters says, this is “one of the most ambitious attempts yet to build ecommerce directly into a social media site.” He goes on to remind us of the e-commerce experience of the two biggest social networks so far, noting that retailers who have used Facebook to “stimulate transactions” have reported “disappointing results” and that much the same is true for merchants who tested Twitter’s own “Twitsclusives” service for issuing discount codes. Well, American Express clearly believes that its experience and expertise in the e-commerce industry will help it do better. We shall see.

But it is AmEx’s strong push of its prepaid card that is more interesting to me and which for some reason has received no attention at all, so far as I can see. As regular readers will remember, back in June of 2011 American Express launched one of the best prepaid cards in the market—a virtually fee-free product. About a year later the issuer did a major upgrade to its offering by adding a provision that made it possible for prepaid users with good track records to eventually upgrade to a charge card (a form of a credit card where monthly charges must be paid in full at the end of each cycle), which was the first such program. Then in October of last year, together with retail giant Wal-Mart AmEx launched Bluebird—a prepaid card that is better than most checking accounts. With that in mind, the Twitter effort seems to be a part of a long-standing strategy. And the $10 discount (40 percent of the card’s value) shows just how serious AmEx is about it.

The Takeaway

I do like what American Express has been doing on Twitter and am not at all surprised to hear that its Sync program has so far been a success. There is every reason to believe that the steeply discounted gift card will be every bit as successful—after all you get free money for sending a tweet. So is there a reason not do it?

Image credit: YouTube / American Express.

Tuesday, February 12th, 2013

How LinkedIn Profiles and Typing Styles Influence Creditworthiness

Tags: credit score, Facebook, social media

How LinkedIn Profiles and Typing Styles Influence Creditworthiness

The Economist has an article on a topic, which until now I hadn’t seen seriously discussed in a major newspaper, although it has a considerable headline-grabbing potential. The topic in question is the use of data gleaned from social media and other non-traditional sources by banks and other lenders to help establish the creditworthiness of loan applicants and other types of potential borrowers. It is a fascinating subject and The Economist tells us that at least some traditional lenders and “a range of start-ups” are already “busily exploring alternative data”.

The first time I heard about creditors being interested in mining Facebook and other social media websites for data on potential borrowers was several years ago and the concept immediately made sense to me, at least as far as the relevance of the data is concerned. Of course there is the issue of privacy, which needs to be accounted for, but, as The Economist tells us, many borrowers, especially younger ones, have no problem at all sharing the information on their Facebook accounts with a credit card company or with another prospective lender. After all, they would share it with anyone, so what difference does that make? But it turns out that there are many other data sources, which lenders across the globe are tapping into.

How to ‘Weed out Likely Deadbeats’ in Africa

Some of the most imaginative uses of alternative data for measuring borrowers’ creditworthiness are to be found in Africa. Here is, for example, how Finca International, an American microfinance firm operating in Africa, does it:

If an applicant has an indoor toilet, or household gifts from a relative working abroad, that is a good sign. Interviewing neighbours also helps, says Mike Gama-Lobo, who looks after Finca’s operations in Congo, Malawi, Tanzania, Zambia and Uganda. Such visits work so well that only 1.5% of loans default each year, but they come at a cost: Finca employs more than 1,200 travelling loan officers in these countries.

Hence Mr Gama-Lobo’s interest in using other data sources to calculate creditworthiness. Nine out of ten loan applicants use a mobile phone. With permission from potential borrowers, analysing usage patterns can help reveal those most likely to default. Frequent calls to or from a rich country are a good sign. So are weekday calls to a nearby market town: that suggests commercial activity.

Isn’t it remarkable just how creative lenders can be? Creative and adaptive to the local conditions. I can’t help but make a parallel between Finca’s process for “weed[ing] out likely deadbeats”, as The Economist puts it, and M-Pesa’s hugely successful mobile phone-based money transfer service. Both companies have developed solutions to uniquely local problems: in Finca’s case—the lack of a credit reporting system—and in M-Pesa’s case—the lack of traditional money transfer services. Neither approach could be applied in, say, the United States, but they both work perfectly well in Africa.

What Do LinkedIn and Upper-Case Typing Have in Common?

Yet, lender creativity isn’t confined to the developing world, the author reminds us. In fact, the rich world offers even more data mining opportunities and none more so than the biggest social networks. Here is how one start-up is using the biggest social network for professionals:

Professional contacts on LinkedIn are especially revealing of an applicant’s “character and capacity” to repay, says Navin Bathija, the founder of Neo, a start-up that assesses the creditworthiness of car-loan applicants. Neo’s software helps determine if applicants’ claimed jobs are real by looking, with permission, at the number and nature of LinkedIn connections to co-workers. It also estimates how quickly laid-off employees will land a new job by rating their contacts at other employers.

And here is how another start-up is using Facebook:

Facebook data already inform lending decisions at Kreditech, a Hamburg-based start-up that makes small online loans in Germany, Poland and Spain. Applicants are asked to provide access for a limited time to their account on Facebook or another social network. Much is revealed by your friends, says Alexander Graubner-M??ller, one of the firm’s founders. An applicant whose friends appear to have well-paid jobs and live in nice neighbourhoods is more likely to secure a loan. An applicant with a friend who has defaulted on a Kreditech loan is more likely to be rejected.

Both approaches make perfect sense to me, but here is the one I found most fascinating:

As statistics accumulate, algorithms get better at spotting correlations in the data. Applicants who type only in lower-case letters, or entirely in upper case, are less likely to repay loans, other factors being equal, says Douglas Merrill, founder of ZestFinance, an American online lender whose default rate is roughly 40% lower than that of a typical payday lender.

As it happens, Merrill’s data confirm an old observation of mine. Long ago I noticed that merchant account applicants whose inquiries shared certain characteristics were much less likely to be sufficiently well qualified or to follow up with me, after I responded to their information request. And yes, these characteristics include typing entirely in upper-case, but also poor grammar skills and an urgency to get a result as soon as possible. Each of these characteristics on its own is sufficient to raise a red flag and I’m pretty sure that all applicants who displayed all of them have proved unqualified.

The Takeaway

So the use of alternative data for financial purposes is already happening and it seems certain to grow exponentially in the coming years. The Economist reminds us of the potential dangers for lenders mining social media sites for data on potential borrowers and such risks are real and can easily lead to negative publicity or even class-action lawsuits. Yet, the risks are greatly minimized when the borrowers’ consent is obtained prior to conducting the research. And, as another example in the article clearly illustrates, many consumers, especially the younger ones who grew up in the digital age, don’t think twice about giving a bank access to their Facebook account. That being the case, why wouldn’t lenders take advantage of it?

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Friday, June 22nd, 2012

Facebook Ditches Credits, Keeps the 30% Payment Processing Fee

Tags: Facebook, social media, transaction processing fees

Facebook Ditches Credits, Keeps the 30% Payment Processing Fee

Facebook is phasing out its digital currency, choosing instead to allow transactions on its domain to be denominated and processed in the sellers’ local currencies, Prashant Fuloria, a Facebook product management director is telling us on the company’s Developer Blog. The shift away from Facebook Credits and toward real money has already begun and is expected to be completed in the next few months.

Even as Facebook Credits are being scrapped, however, the social network is keeping its payment processing pricing model intact. So all transactions, in whatever currency they may be processed, would still be subject to a 30-percent fee, charged to the seller’s account. All the while, payment fees are becoming a huge revenue source for the social media giant, quickly making up ever more ground on the still dominant advertising channel. And there is a lot at stake.

Facebook Credits Scrapped

Here is what Facebook’s Fuloria has to say about his company’s transition from Credits to real money:

Since we introduced Credits in 2009, most games on Facebook have implemented their own virtual currencies, reducing the need for a platform-wide virtual currency. As a result, we are updating our payments product to support pricing in local currency (ex: US dollar, British pound and Japanese yen) instead of Credits.

By supporting pricing in local currency, we hope to simplify the purchase experience, give you more flexibility, and make it easier to reach a global audience of Facebook users who want a way to pay for your apps and games in their local currency. With local pricing, you will be able to set more granular and consistent prices for non-US users and price the same item differently on a market-by-market basis.

This decision makes perfect sense to me. Credits did make the transaction process more cumbersome than necessary, especially considering the fact that app developers also tended to introduce their own currency. So, to buy a digital chicken on FarmVille, one would first need to buy Facebook Credits with real money and then convert them to Farm Cash, the in-game currency used by Zynga, FarmVille’s maker. I think that all these in-game currencies should go too, which would benefit everyone involved, including, by the way, the developers who might well find that a simplified transaction process leads to increased sales. On the other hand, I cannot see a single benefit of having one’s own digital currency. Evidently, Facebook executives share my view point.

The 30-Percent Payment Processing Fee

Facebook Ditches Credits, Keeps the 30% Payment Processing FeeCredits may be gone, but Facebook’s “underlying payments product, along with support for global payment methods, and policies will remain the same,” Fuloria tells us. So the developers would still be charged a fee of 30-percent of the transaction amount for each payment they accept on Facebook. That is a huge price to pay, but there is no alternative. To get an idea of just how high Facebook’s processing fee is, consider that, if a developer were selling his digital wares on his own website, his payment fees would never have been higher than three percent or so and most of his transactions would have been processed at a considerably lower rate.

However, as far as Facebook is concerned, its payment fee structure is just fine. In the first quarter of this year, payment fees comprised 18 percent of the social network’s total revenue, up from 15 percent in 2011 and less than five percent in 2010. At this rate, a couple of years from now payment processing could surpass advertisement as the top revenue producer for the company. Yet, there are potential pitfalls along this road and the biggest one among them is Facebook’s dependence on Zynga, as the social network itself acknowledged in its Prospectus:

In 2011 and the first quarter of 2012, we estimate that up to 19% and 15% of our revenue, respectively, was derived from Payments processing fees from Zynga, direct advertising from Zynga, and revenue from third parties for ads shown on pages generated by Zynga apps. If Zynga does not maintain its level of engagement with our users or if we are unable to successfully maintain our relationship with Zynga, our financial results could be harmed.

So the lion’s share of Facebook’s fee revenue was generated by Zynga and that should indeed be a source of concern.

The Takeaway

I expect that, over time, Facebook’s dependence on Zynga’s performance will diminish. The issue that I see is that the social network’s transaction rate is just too high to be sustainable in the long run. For now developers are quietly, albeit grudgingly, going along with it, but that is unlikely to last for too long. I suspect that, sooner or later, people will start voicing their frustration with the 30-percent rate, just as retailers are constantly protesting against credit and debit card fees (and they won a big victory on the debit card front last year!). Eventually Facebook will have to lower its rate or it may well find itself ion the wrong end of an antitrust law suit. After all, the social network is exploiting its monopolistic status.

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