updated 02:35 pm EDT, Mon April 14, 2014
Irish regulatory approval could be granted to Facebook within weeks
Facebook is working to provide financial services, such as allowing users to send money to each other, according to a report. The social network is said to be applying to regulators in Ireland to begin offering money storage and transmissions, something which could receive approval within weeks, and would directly place Facebook in competition with PayPal, Google Wallet, and other similar services.
The electronic money or "e-money" approval request would allow Facebook to provide such services across Europe, reports the Financial Times. The license from the Central Bank of Ireland would let Facebook issue e-money to users, and through a process called "passporting," the value would be held throughout the continent. This would in effect let users pay for goods or services, or directly send payments to each other.
Facebook CEO and founder Mark Zuckerberg
It is claimed that Facebook has already spoken to at least three international money transfer providers based in London for a partnership deal, with the list including Moni Technologies, TransferWise, and Azimo. In at least one case, Facebook has made considerable offers, with the Financial Times claiming Azimo was offered $10 million to recruit one of its co-founders.
It is believed by report sources that the plans could allow Facebook to provide mobile payments, with a view to becoming dominant in the field in emerging markets. One source familiar with the plans claimed "Remittances are a gateway drug to financial inclusion," and by vying to be the first major mobile payments service a customer uses, it is likely that the customer will continue to use it.
While not directly a money transfer service, Facebook has worked on its own financial systems in the past. Facebook Credits, introduced in 2009, allowed users to buy credit allocations and use the currency to pay for items within games on the service. It was phased out in 2012 in favor of payments in individual currencies for in-app purchases. Facebook currently receives a 30-percent cut of transactions made on the social network itself, and is believed to make up approximately ten percent of the company's revenues.