Conspicuous consumption is inherently social: You can’t signal your status to peers if no one is watching. So social media, which can transmit status signals on a global scale, are platforms made for preening.
The French bank Groupe BPCE last week introduced a service enabling customers to send money via tweet. Account holders with mobile phones will be able to link the bank’s money transfer service, which has about 100,000 users, to Twitter accounts, sending up to 500 euros, about $635. (Hashtag: #envoyer.)
Similarly, Facebook has a transaction deal with Rakuten Bank of Japan to let users transfer money on its network. Twitter has also been testing a buy button to let users make purchases directly from their accounts. We’re still a long way from seamless spending on social networks. But these advances suggest we’re moving in that direction, with the potential for transactions, including consumer spending, to become much more public.
Spending via a public platform could entail a nearly complete surrender of personal data. Marketers wouldn’t search for clues about what we buy — they would have the transaction records. Yet for some self-conscious consumers, such transparency might be the whole point.
Social media are excellent tools for broadcasting status. You can highlight your influence by flaunting your follower count, engaging in dialog with distinguished social connections, bragging about a recent experience at an exclusive event or featuring selfies with celebrities. It’s a virtuous cycle of raising your status by constantly advertising it.
Similarly, the ALS Ice Bucket Challenge was successful in part because it gave people a highly public means to display their altruism. Making contributions via social media will provide the same service, minus the chill. Venmo, a popular app among millennials, already allows users to send money instantly and see recent transactions friends have shared. It’s now the sixth most popular free finance app on the Apple app store.
It used to be that if you wanted to show off your wealth and status, you built a pyramid, bought a Lamborghini or wrote a check in return for getting your name on a building. Soon, you may only have to tweet to reap the psychic rewards of conspicuous consumption.
©2014 Bloomberg View