Facebook (NASDAQ:FB) is close to launching financial services, including mobile payments, in Europe. The move would provide the social media site with the ability to offer person to person payments.
The social network is seeking regulatory approval from Ireland’s central bank to become an “e-money” institution, reported the Financial Times. The approval extends to the rest of Europe.
Facebook is also exploring potential partnerships with three more London start-ups that offer digital money transfer services and has been actively trying to recruit in this sector, according to FT.
Facebook has been on an acquisition tear in recent months. In February, it announced plans to acquire WhatsApp, a cross-platform mobile messaging company, for approximately $19 billion. WhatsApp allows users to send messages over the internet, bypassing their wireless carrier. More than 450 million people use the service each month, with 70 percent of those people active on a given day.
“WhatsApp is on a path to connect one billion people. The services that reach that milestone are all incredibly valuable,” said Facebook founder and CEO, Mark Zuckerberg, at the time.
The platform could also help drive mobile payments between people, if not retailers. Part of WhatsApp’s appeal is its ability to reach younger users, or millennials. The addition of payments could help convert these users to shoppers, and serve as a stepping stone to accepting payment in brick and mortar stores.
“There’s an easy way to extend what they’re doing into the payment space,” said Ken Paull, CEO, ROAM, a provider of m-commerce platforms (ROAM does not work with Facebook). “This is step one, there are a number of steps they can take in integrating a (mobile platform) into a physical POS.”
Europe is a more mature market in terms of payments and one that might be a bit friendlier to such an effort, speculates Paull. It also could help deepen Facebook’s reach into emerging markets: The social network recently surpassed 100 million users in India, according to FT.
Facebook’s entry into mobile payments could be a game changer. Said Paull, “Almost every business has a Facebook page, that’s a strong lead-in.”