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Facebook plans to launch money transfer service in Europe

Facebook plans to launch money transfer service in Europe

Facebook plans to launch money transfer service in Europe

Social network Facebook is planning to launch a mobile money transfer service in Europe, as well as in developing countries.

In Ireland it is understood that the company – which employs 500 people in Dublin – has applied for Central Bank authorisation for e-money status that would allow it to issue units of monetary value.

Such a service would allow Facebook to allow members to send units of financial value to one another, as well as buy digital content, such as movies, books and games within Facebook or via app partners.

The move will also enable Facebook to capitalise on the growth of mobile money transfers in developing countries in Africa, Asia and South America, where significant chunks of the population have yet to open their first bank account.

The service could allow users to send money to friends and family via their mobile devices.

It is understood that Facebook is only weeks away from receiving e-money provider status in Ireland.

The company is understood to have discussed partnerships with Azimo, Moni Technologies and Transferwise.

Facebook is understood to have hired one of the co-founders of Azimo, a company backed by venture capitalist Peter Thiel, as a director of business development.

Facebook already offers some money transfer services in India via ICICI Bank, that allows users of the social network to send each other money, as well as in-app purchasing services in the US.

Facebook’s push into mobile money transfers makes sense

The move makes perfect sense says Ed Zoller, m-payments specialist at Ovum, who predicted the renewed push on payments by the social network.

“Ovum predicted Facebook would launch a renewed push into mobile payments this year and its focus on mobile money transfers makes sense.

“These applications are gaining good traction with consumers, particularly in emerging markets where Facebook has ambitions to be the prime platform from which people access, and interact with Internet services.

“Facebook’s user base in emerging markets is growing fast (some 200m in Asia alone at Q4 2013) but when it comes to mobile payments and financial services, Facebook will have its work cut out and the biggest challenge will be consumer trust. 

“Ovum’s 2013 Consumer Insights found that only 1pc of respondents trusted social networks like Facebook to deliver m-payments, in sharp contrast to the much higher levels of trust placed in banks (43pc) credit card companies (13pc) and mobile operators in the context of emerging markets (11pc in China).

“It also remains to be seen how well Facebook will execute m-payments given its poor track record with m-commerce applications. 

“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,” Zoller said.

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