Technology

Thursday 31 July 2014

Facebook wants approval for e-money service here

Published 14/04/2014|08:35

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Facebook founder and CEO Mark Zuckerberg. Photo: AP
Facebook founder and CEO Mark Zuckerberg. Photo: AP

Facebook is preparing a push into financial services, according to a report, with tools for members to store and send money online.

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The social network has applied to Irish authorities for a licence that would allow it to provide remittance and electronic money services to its members across Europe, The Financial Times said. Dublin hosts Facebook’s headquarters for Europe, the Middle East and Africa.

Facebook has reportedly held also discussions with three London-based international money transfer providers, TransferWise, Moni Technologies and Azimo, to help it build the services.

Allowing members to send remittances via their Facebook accounts could strengthen the social network in emerging markets. Migrants send hundreds of billions of dollars home to developing countries every year where large sections of the population do not have bank accounts.

Facebook would be taking on wire transfer services such as Western Union, existing electronic money providers such as PayPal and a new breed of mobile phone-based payment services, of which Vodafone’s M-Pesa is a leading example.

“Facebook wants to become a utility in the developing world, and remittances are a gateway drug to financial inclusion,” a source familiar with the plans reportedly said.

Facebook has not commented on the report, calling it "rumour and speculation".

Mark Zuckerberg, Facebook’s chief executive, made it clear in a recent speech that emerging markets are high on his agenda. He called on mobile operators to offer access to Facebook for free in emerging markets to accelerate internet take-up. The appeal received a cool reception, however.

Facebook’s move into financial services would represent a strategic shift, but the company already handles payments. Although it makes most of its money from advertising, Facebook takes a cut of $2.1bn in transactions via its website and apps annually. Almost all the payments are related to online games.

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