Social media giant to enter lending business

by Rachel.Norvell14 Oct 2014
With rumors already circulating about Facebook’s intention to offer payment services, the social media giant is now also believed to be looking at lending.

According to technology news insider, Facebook is in talks with peer-to-peer lending services, including Lending Club and Prosper, about integrating a way for Facebook users to get loans through the social network. The conversations began several months ago and have continued as Facebook has gotten more serious about its payment strategy.

While neither of the potential partners currently offer home buying loans, the peer-to-peer lenders do offer home improvement loans.

Currently, the social network is rumored to be planning a way to allow users to exchange money using its Messenger app. The International Business Times reported a Stanford student found code within the iOS version of the Messenger app that allows users to add payment cards (only debit for now) and PIN codes to send money. Facebook made 92%  of its revenue in the last quarter from ads and mobile payments could be a way for the company to diversify its sales.

Still in the beginning stages, it is unknown what types of loans Facebook will offer. However, the social network could be a big competitor to lenders with its access to more than 1 billion users.

Shares of Facebook (NASDAQ: FB) went down sharply on Friday after released the article regarding the company's intentions to pursue lending. Shares of Facebook dropped to $73.11 on Friday, down 3.9% from $75.91 per share on Thursday. Facebook’s stock price closed at $72.99 per share on Monday.


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