Facebook to launch e-money services
Facebook wants to provide financial services in the form of remittances and electronic money, the Financial Times reported, saying the company was only weeks away from obtaining regulatory approval in Ireland.
Several sources said that the service will allow users to store money on Facebook and use it to pay and exchange money with others.
The authorisation from Ireland’s central bank to become an 'e-money' institution will allow Facebook to issue units of stored monetary value that represent a claim against the company. The e-money would be valid throughout Europe via passporting.
Facebook has also discussed potential partnerships with TransferWise, Moni Technologies and Azimo, all London start-ups that provide international money transfer services online and via smartphones. In the case of Azimo, Facebook offered to pay $10 million to recruit one of its co-founders as a director of business development, sources said. A Facebook spokesperson declined to comment.
The money transfer project, led by Facebook VP of platform partnerships Sean Ryan, signals a strategic shift for the company, which makes most of its money from advertising. Obtaining an e-money authorisation in Ireland would require Facebook to hold capital of Euro350,000 and segregate funds equivalent to the amount of money it has issued, according to legal experts.
Facebook is already authorised for some forms of money transfer in the US, allowing it to process payments for developers who charge users for in-app purchases.