European E-Money License Could Grow Facebook’s Remittance Biz (April 14, 2014)
Facebook is putting the pieces in place to launch a money transfer service in Europe. The social network is weeks away from obtaining an e-money license in Ireland, where its European operations are based, according to a report by the Financial Times. Facebook also has been in talks with at least three London-based startups offering international money transfers via online and mobile, the report claimed, citing sources involved in the process. Taken together, those signs could point to the company taking an interest in international remittances, especially to emerging markets, where Facebook could use money transfer to grow its presence.
In the U.S., Facebook already is licensed for some money transfer activities. The largest chunk of its transfer business comes from processing in-app payments for developers whose apps run on the network. Facebook’s cut of those payments represents 10 percent of the company’s revenue, according to SEC filings. But the company has otherwise had a somewhat bumpy history with payments, abandoning its Facebook Credits digital currency in 2012, just two years after introducing the currency, and dealing with lingering user uncertainty about storing payment details on a social media site.
But those issues haven’t deterred Facebook from payments. Earlier this year, Royal Bank of Canada launched a mobile P2P money transfer service that is integrated with users’ Facebook accounts. And last fall, the company debuted a feature enabling shoppers to use payment and shipping information stored with Facebook when making purchases via a pair of mobile apps. The company also offers a gifting service that emphasizes digital code-based gift cards and its Facebook Card, a reloadable physical gift that can be used at several brick-and-mortar merchants.