Facebook is advancing its reach to provide a money transfer service in Europe from a base in Ireland. The Guardian announced on Monday that Facebook was seeking the e-money commerce status to issue digital credits for conversion into cash for its customers.
Storing the money within the social network would allow Facebook opportunities to compete with Western Union and give storing of money within the social network options to buy online. It currently allows within apps forms of money transfer in the US through payments within the King games of Candy Crush Saga and Farmville games. Facebook gets a 30% cut from that action the same as Apple takes 30% from its game and apps in its Apple stores when an app is purchased.
The ease of establishing an e-money service in Ireland for Europe would allow for digital payments to be used across the EU member states without regulatory approval from each one. The World Bank lists the remittance market world-wide is $500 billion and Facebook can expand its strategy once successful in Europe to the market of developing countries. BRIC (Brazil, Russia, India and China) country India has more than 100 million users of the Facebook accounts of 1.2 billion.
Competitive rivals in money transfer come from Amazon, where CEO, Jeff Bezos, lists payment systems as a priority as does Google with its Google Wallet services in the US. Google is authorized in the UK already.
Payments and e-money services are an expanding area of the financial services and technology market; though Facebook's big ‘Net’ rivals have been more focused on payment systems than money transfers. Facebook wants to focus on the financial services and technology market and cut out its pie in that domain. It will be a good fit for its long term vision of ‘connectivity’ with Internet.org where it plans to reach the extra 2 billion of people on the globe not easily connected due to difficult terrain or sparse population.
PayPal has advanced to using the fingerprint scanner in the Samsung Galaxy S5 smartphone to authorize within its app a one touch payment authorization. Amazon has the successful ‘one-click’ on Amazon to make a payment.
What does this type of e-commerce system do for cryptocurrency Bitcoin in global money transfers and payments? Thomas Alvarez, Coincove’s bitcoin-based remittance specialist, sees Facebook’s market entry could remove the stigma from monetary services attached to social networks. That attitude of global transfers and payments is a plus for the bitcoin industry.
Boost VC founder and CEO, Adam Draper, finds the bitcoin lining in this as the big ‘Net’ companies tackle the issue of transfers and payments, and states, 'this is exciting, it means that the big companies are playing in the same space.'