The Financial Times reported this week that Facebook is looking into adding electronic money transferring to its ecosystem.
Stories say that the social network is only “weeks away,” from getting properly approved in Ireland for a service that would let user store money on Facebook and use it to exchange money with friends and pay for goods — similar to PayPal.
This process would allow Facebook to become an “e-money” institution and make it so its European users can send money throughout the continent. Financial Times notes that Facebook has discussed partnering with a few London-based startups that specialize in money transferring services via desktop and mobile: TransferWise, Moni Technologies and Azimo. It would also require Facebook to hold €350,000 and segregate funds equal to the amount of money it has earmarked for this service.
But why is Facebook reportedly getting into this market?
Patrick Salyer, CEO of Facebook Preferred Marketing Developer Gigya, gave his take to Inside Facebook:
Facebook has given strong indications lately that it’s ready to become a major player in the eCommerce arena: the WhatsApp acquisition – which gives it access to millions of credit card records and which has a huge international reach, testing of auto-billing functionality, and now the news of financial service offerings confirm that they consider this space a key component in the larger war to own consumer identity. Going after the money transfer market could help Facebook gain access to payment information on a huge number of users while also extending the network’s presence in emerging markets. Although Facebook will need to find a unique model that differentiates from money transfer providers like PayPal or Western Union, payments could be a trojan horse for the social network’s quest to own consumer identity.
Facebook has declined to comment on the report — a standard practice for rumors and speculation.
Readers: Do you think this would be a worthwhile venture for Facebook?
Image courtesy of Shutterstock.