Home  › Social › Social Media
facebook-like

Facebook Prepping e-Money Transfer Service in Europe

  |  April 15, 2014   |  Comments

Facebook is reportedly planning an e-money service in Europe, which would allow users to make transactions directly through the social network.

Facebook is close to regulatory approval in Ireland for creating an in-house digital currency system that users can buy and sell with on its site, according to reports by The Financial Times (FT).

If Facebook obtains the authorization from Ireland's Central Bank, the social network will be able to issue units of stored monetary value that represent a claim against the company. Users will then be able to use the e-money to make transactions throughout the European Economic Area (EEA).

This practice is called "passporting," in which the EU has simplified the regulatory environment for financial services, allowing digital payments to be used across member states without having to gain regulatory approval from each one. It would require Facebook to hold capital of €350,000 and segregate funds equivalent to the amount of money it has issued.

Meanwhile, Facebook is rumored to be looking for further financial services opportunities in Europe. The FT says that the social network has been in discussions with at least three London-based start-ups that provide international money transfer services online and via mobile, including TransferWise, Moni Technologies, and Azimo. It is still unknown whether Facebook will position itself as a mobile payment platform in the near future.

"The banking and payment industry is undergoing a period of massive disruption. High distrust in banks, outdated payment models, and new technologies enabling new behaviors make the e-wallet market attractive," says Paul Munkholm, director of strategy at Kettle, a New York-based boutique digital agency. "The winners will likely be trusted brands that are rooted in technology and innovation, and have built large [and] engaged communities."

A Facebook spokesperson declined to comment.

The social network already has permission for some forms of money transfer in the U.S., which allow payments within apps, including the Candy Crush Saga and Farmville games, from which Facebook charges a fee of up to 30 percent. The company facilitated $2.1 billion in transactions across Facebook in 2013, primarily to game developers.

E-money represents a competitive landscape for Facebook. Just last May, Google incorporated Google Wallet into Gmail, which allows users to make payments through their email accounts with a transaction limit of $10,000. China's Internet giants Tencent and Alibaba started rolling out mobile credit cards last year, but their practice was soon halted by the country's central bank, due to security concerns.

Nevertheless, Munkholm says that the financial services industry presents a good opportunity for Facebook. "This market is a natural fit for Facebook. A transactional platform with programs like Facebook Gifts is already in place," he says. "As they move into the e-wallet space, they will be able to eliminate the middle man like PayPal to increase their margins."

ClickZ Live Chicago Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, Oct 3 to take advantage of Early Bird Rates!

ABOUT THE AUTHOR

Yuyu Chen

Yuyu Chen is an Editorial Intern at ClickZ. Her work has appeared in Local East Village, New York Daily News and Brooklyn Chamber of Commerce website. Yuyu received her M.A. in Business and Economic Reporting from New York University in May, 2013.

COMMENTSCommenting policy

comments powered by Disqus

Get ClickZ Social newsletters delivered right to your inbox. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

IBM: Social Analytics - The Science Behind Social Media Marketing

IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.

An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising

An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising
If you're considering implementing a marketing attribution model to measure and optimize your programs, this paper is a great introduction. It also includes real-life tips from marketers who have successfully implemented attribution in their organizations.

Jobs

    • Recent Grads: Customer Service Representative
      Recent Grads: Customer Service Representative (Agora Financial) - BaltimoreAgora Financial, one of the nation's largest independent publishers...
    • Managing Editor
      Managing Editor (Common Sense Publishing) - BaltimoreWE’RE HIRING: WE NEED AN AMAZING EDITOR TO POLISH WORLD-CLASS CONTENT   The Palm...
    • Senior Paid Search & Advertising Manager
      Senior Paid Search & Advertising Manager (Smarty Had A Party) - St. LouisCompany Description: A warm, loving, [slightly wacky] startup, we view...