Facebook Seeking Approval for e-Money Services

The biggest social network of the world is very close to getting the Irish regulatory approval that it needs for providing financial services in the form of electronic money and remittances. Several people who are part of the process have said that the Facebook is only a few weeks away before it gets its hands on the regulatory approval for a service that would enable users to store money on the social network and then use it for exchanging money with others or paying them. Facebook would get the right of issuing units of stored monetary value if Central Bank gives it the authorization to become an e-money institution.

The units having monetary value will simply be an indicator of claim against the company. A process known as ‘passporting’ would make this e money completely valid all over Europe. However, legal experts have stated that the company would need to have at least a capital of 350,000 pounds if it wishes to obtain authorization for e money in Ireland. They have also added that Facebook would need to segregate funds that would be equivalent to the amount of money it decides to issue. The company is most likely to be embedded even further into the Republic with this move, where it already has about 500 workers functioning at its international headquarters.

Near the end of last year, the company had made a move for doubling the size of the office space that it currently rents in the south docklands of Dublin, which would give it considerable room for expansion. Potential partnerships have also been discussed by Facebook with three startups based in London that also offer online money transfer services internationally and through smartphones. These startups include Moni Technologies, TransferWise and Azimo. This information was provided by three individuals who were part of these discussions.

As far as Azimo was concerned, the social network had been willing to pay a sum of $10 million for recruiting one of the co-founders of the startup as a business development director, according to people close to the matter. When a Facebook representative was asked, they said that the company did not make any comments on speculation and rumors. Because the social networking giant wishes to boost its presence in emergence market, it is choosing to make a foray into these migrant remittances. An expert who is familiar with this strategy said that Facebook wishes to enhance its presence in the developing world and the ideal gateway drug to financial presence is remittances.

Recently, the social network managed to achieve the milestone of 100 million users in India, which is the largest national market it has outside the United States. However, so far, it isn’t clear if people will be ready to trust Facebook with their money because of the concerns they have about personal data use of the company for boosting the advertisements on its website. Sean Ryan is leading the money transfer project, who is the company’s vice president of platform partnerships and has said that this is a strategic shift for the company.

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