Facebook seeks European e-money license for remittance play

Facebook seeks European e-money license for remittance play

Facebook is just 'weeks away' from getting an e-money license in Ireland that would allow its users to hold and exchange money on the social networking site, according to the Financial Times.

Citing "several people" involved in the process, the FT says that Facebook has also discussed potential partnerships with at least three London start-ups that offer international money transfer services online and via smartphones: TransferWise, Moni Technologies and Azimo.

In the case of Azimo, Facebook offered to pay the company $10m to recruit one of its co-founders as a director of business development, says the FT.

Facebook already has an equivalent money transfer license in the US, allowing it to process payments for developers who charge users for in-app purchases.

However, a European e-money license is seen as a way for the company to extend its reach into emerging territories via the provision of remittance-based services.

"Facebook wants to become a utility in the developing world, and remittances are a gateway drug to financial inclusion," 'a person familiar with the company's strategy' told the FT.

Eden Zoller, m-payments experts at Ovum believes Facebook will have its work cut out in gaining consumer trust and overcoming its poor track record with mobile commerce in the past.

"Ovum's 2013 Consumer Insights found that only one percent of respondents trusted social networks like Facebook to deliver m-payments," he says. "The Facebook Credits virtual currency got nowhere and was wound down last year, while the main m-commerce offering in place today, Facebook Gifts, has so far received a muted response from consumers."

Comments: (1)

A Finextra member
A Finextra member 14 April, 2014, 11:01Be the first to give this comment the thumbs up 0 likes

You can already use certain platforms to send money through social networks such as facebook...Im curious as to see where they go with this, if like the US its seen as a way to process payments for developers...