By Mohammed Waseem
We have learnt about Facebook’s interest in entering the money transfer industry. They have partnered with Royal Bank of Canada, GoEmerchant, MiPay, Azimo and other companies to send and accept money. Would it be surprising if they come up with a service to compete with the likes of Western Union and MoneyGram? Well, they are actually in the process of introducing such a service.
Facebook is merely weeks away from its own online money transfer service, as reported by Forbes and PC World. They are waiting for the regulatory approval from the Central Bank of Ireland. Once they get the approval, they will have the permission to operate throughout the European Union, in all member countries, without the need to obtain regulatory approvals in each of the countries.
After the authorization, Facebook will become a registered e-money institution according to the Financial Times, which also reported that they have discussed potential partnerships with three London based money transfer services: Azimo, Moni Technologies and TransferWise. Facebook plans to launch the service in Europe first, and then move to emerging markets.
A threat Facebook faces is the trust issue; according to experts, only 10% of the US consumers showed interest in a mobile wallet offered by Facebook, due to the security and privacy issues. With over a billion active users, they do have a huge potential, but only if they are successful in convincing them all that their information will remain secure and if required, they should provide a guarantee concerning this.
Facebook probably has plans to introduce such a service in the US as well; they have already obtained Money Services Business (MSB) licenses in 48 US states. Having said that, what is most critical to their new service is the trust issue. Many users feel uncomfortable sharing personal data on Facebook, so such uncomfortable feeling is truer in case of money.