Facebook is mere weeks away from becoming a registered e-money firm in Ireland, the Financial Times reported.
The Central Bank of Ireland will soon authorize the company as an e-money institution, the newspaper said, citing “several people involved in the process.” That authorization would allow Facebook to provide e-payment services in other EU member states, according to the bank’s website.
Facebook will be permitted to issue units of stored monetary value that will be valid throughout Europe via a process called “passporting,” according to the newspaper
The Central Bank of Ireland declined to comment on the matter. A Facebook spokeswoman said in an email she wouldn’t comment on rumor or speculation.
According to the Financial Times, Facebook has discussed potential partnerships with three London-based international money transfer services: Azimo, Moni Technologies and TransferWise.
TransferWise declined to comment on a possible partnership. Moni and Azimo did not immediately respond to a request for comment.
But Facebook has its sights set on more than Europe, with plans to push into emerging markets, according to the Financial Times, citing a source “familiar with the company’s strategy.”
“Facebook wants to become a utility in the developing world, and remittances are a gateway drug to financial inclusion,” the source was quoted as saying.
The turf of established banks has increasingly been stepped on by companies from outside of the traditional financial services sector, noted Jordan McKee, a commerce strategies analyst at Yankee Group, in an email. It also pits the company against Google and Amazon.
“Facebook’s interest in e-money is not dissimilar to moves we’ve seen by Google and Amazon in the payments space,” McKee said.
Whether consumers will trust Facebook with their money is up in the air. A Yankee Group survey found that only 10 percent of U.S. consumers would choose a mobile wallet from Facebook, McKee said, adding that security and privacy concerns could be a core driver of the low interest.
“The motivators for an entrance into financial services vary, but given Facebook’s core business, data is certainly a driver,” McKee said.
This won’t be Facebook’s first foray into the digital payment arena. The social network stopped its Facebook Credits virtual currency program for in-app purchases after low adoption, replacing it with a system favoring local currencies in 2012. And Facebook Gifts, a service that lets users send gifts to friends, has yet to be embraced, McKee said.