Facebook, Inc. is few weeks away from becoming a registered e-money institution in Ireland, a move that will pave the way for Facebook to provide e-payment services in other member states of the European Union.
The Financial Times reported that the Central Bank of Ireland will soon authorize Facebook as an e-money institution. This means that Facebook can provide e-payment services in other EU member states. Both the central bank and Facebook have refused to comment on the news.
The Central Bank of Ireland will also allow Facebook to issue units of stored monetary value that will be valid throughout Europe via a process called "passporting."
The Financial Times said Facebook has opened partnership talks with three London-based international money transfer services: Azimo, Moni Technologies and TransferWise.
Facebook, however, seems to see its ultimate goal as providing e-payment services in emerging markets. A source said Facebook wants to become a force in the developing world, and remittances are a gateway to financial inclusion.
"Facebook's interest in e-money is not dissimilar to moves we've seen by Google and Amazon in the payments space," said Jordan McKee, a commerce strategies analyst at Yankee Group.
Facebook has charged into the digital payment arena before. It launched Facebook Credits, a virtual currency program for in-app purchases that it eventually dropped after low adoption. In 2012, Facebook Credits was replaced with a system favoring local currencies.
A survey by the Yankee Group revealed that only 10 percent of US consumers would choose a mobile wallet from Facebook. Security and privacy concerns could be the cause of the poor interest.