Besides serving as a platform to connect with friends and family, it looks like social media could serve another purpose: protecting against payment fraud. Companies like EBay, PayPal, WePay, Equifax and intuit have begun trials to see whether the information we share on social media can help verify identities or detect whether customers are lying about their finances.
Even from accessing the information on our social networks that is publicly available, these companies have enough information to surmise whether a transaction is high risk. They can detect, for example, whether the "current city" or recent location check-ins or tags on Facebook matches the shipping address for the goods a person is trying to purchase.
But what about fraudsters with fake social media profiles? Although anyone can create fake social profiles, it's hard to fake a digital footprint that comes from real social interactions. An average Facebook user, for example, is tagged by friends more than 70 times a year. In addition, a fake social media account can be detected by some criteria like the date it was created, the number of connections, how frequently is updated etc.
Although many social media users are concerned about how companies are using their data for advertising, using data from social media to protect consumers against online payment fraud would ultimately be beneficial for users, especially as online payment fraud costs an estimated $1 billion per year in Asia alone.