Facebook is set to become an electronic money provider in Europe.
The Financial Times reports that Facebook will obtain approval for an electronic money service within the next few weeks, potentially pivoting the company’s direction to provide money remittance services around the world.
E-money services allow a company to provide a centralized store of value, and pending approval from Ireland’s Central Bank, Facebook’s e-money service can be used to send funds throughout Europe through “passporting” to other European Union members.
This move compliments the growing number of Facebook users in developing countries.
Facebook reached more than 100 million users in India, and is the second largest population of users of the social network behind the United States.
This could be a synergistic move to increase both the user base of the social network and a new stream of revenue by providing money remittances.
A leading mobile remittance provider, Vodafone’s M-Pesa platform, recently entered Romania.
It’s seen tremendous growth and usage in Kenya, and sets a good example of providing financial services for areas that don’t possess the infrastructure to offer traditional banking, or are otherwise based on a cash economy.
Facebook flirted with something similar in the U.S. with Facebook Credits, which were mainly used to provide payments for games and apps on the social network.
There’s an opportunity here to undercut global money remittance leaders like Western Union, with a cheaper and more open alternative.