[IMGCAP(1)]
The growing popularity of Social networking sites has captured the attention of the payments industry.
Pulse, the Discover Financial Services' electronic funds transfer network, has joined Facebook and Twitter, and First Data Corp. says it is considering such a move for its Star network.
Both companies view the sites as a means to communicate with and educate customers and potential customers. One analyst contends, however, the decisions by Pulse and other companies to buy pages on Facebook and Twitter are part of a herd mentality and are not well thought out. But others see value in using social-networking sites for promotional purposes. Pulse, for example, views the sites as educational tools.
Houston-based Pulse joined Facebook and Twitter to draw attention to Debitfacts.org, the network's Web site that explains debit card use and money management to consumers, says Steve Sievert, a company spokesperson.
Debit card processing involves payments networks working with each other, outside the view of the general public, but Debitfacts.org provides the public with an understanding of debit cards, debit card safety and money management, Sievert says.
"Our goal is to reach out to cardholders where they are already gathering," says Steve Sievert, a Pulse spokesperson. "With the economy being in recession, using social-networking sites is a way to reach them."
Pulse launched Debitfacts last October. The network regularly updates the Web site with articles written by Pulse staff and third-party consultants, Sievert says. Since Pulse launched Debitfacts, thousands of consumers have visited the site, he says.
"We are very pleased with the response Debitfacts.org has received," Sievert says. "When we launched Debitfacts.org, there was not a site that explained debit cards or how they are supposed to be used, so it was difficult to determine how much traffic would flow to the site."
Pulse's decision to place Debitfacts pages on Facebook and Twitter will only increase the number of potential visitors, he says.
Palo Alto, Calif.-based Facebook Inc. had 68.5 million unique visitors in January, according to Compete.com, a Boston-based blog that ranks 25 social-networking sites.
Twitter, a privately held San Francisco-based company, says it had 5.9 million unique visitors in January.
Twitter is the third most-used social-networking site behind MySpace.com, which had 58.5 million unique visitors in January, according to Compete.com. Lately, however, Twitter has received a lot of publicity because of actor Ashton Kushner's race with CNN to see whichwould be the first to hit 1 million followers on Twitter. Kushner won.
Ron Shevlin, senior analyst with Aite Group LLC, a Boston-based consultancy, does not see the value of Pulse on Facebook and Twitter to promote Debitfacts. "Twitter and Facebook are social-networking sites," he says. "People use Twitter for personal reasons, and individuals 45 to 50 years old use Facebook to connect with old buddies."
Twitter also has another downside. It has a low-user retention rate, according to a recent Nielsen survey.
Sievert admits Debitfacts faces an uphill battle in trying to get its name in front of a larger audience. "We're in unchartered waters," he says. "We're going to give it time. We already have nearly 50 followers on Twitter, and that's pretty good."
Consumers use Twitter and Facebook to follow Debitfacts' actions, and Debitfacts sends messages to followers on both sites.
Pulse's first tweet (the name of a Twitter message) involved Debitfacts telling followers that they should access their money with their debit cards, a very basic piece of information. The second tweet was a question designed to invite dialogue, Sievert says. "We wanted to know what type of card they used the most: debit or credit."
Pulse's public relations staff decides which questions to pose on the two sites, he says.
Facebook provides Pulse with more page space to explain Debitfacts. Pulse is playing the first of four videos concerning debit card use on the Facebook site, Sievert says.
The decision to add pages to Twitter and Facebook is designed to drive consumers to the Debitfacts Web site. But that might not happen if few know of Debitfacts, Sievert says.
Shevlin doubts companies will benefit by placing pages on Twitter and Facebook, but he realizes businesses will continue to do so.
Indeed, transaction processor First Data Corp. is among those companies that see value in social networks, and it plans to place pages on some or all of them.
Star does not have a money-management site similar to Debitfacts, but Greenwood Village, Colo.-based First Data believes the sites could be beneficial, according to Glen Turpin, a First Data spokesperson.
"We believe that social-media tools create excellent opportunities for companies to educate and inform," he says. "You'll see us adopting social-media tools in the near future."
Shevlin, who has had a Twitter account, claims he had never heard of Debitfacts until he discovered he was on Twitter's list to receive e-mails.
"I received a tweet at 11:30 a.m. I have no idea why they are following me," he says. Sievert knows."We want to increase the dialogue about financial-payment methods, so we are reaching out to like-minded people," he says. ATM
