Mark Zuckerberg apparently wants to be both your social director and your banker. According to a report from Financial Times, Facebook is weeks away from receiving regulatory approval from Ireland’s central bank to be a recognized e-money institution. This status would allow people to store funds on Facebook and use them to transfer and make payments to others. The capability would be valid throughout Europe.
Analysts see the move as an attempt by Facebook to become a broader service, especially in emerging markets. But conceivably it also positions Facebook to be an m-payments provider. According to Ovum’s m-payments expert Eden Zoller, “[Facebook’s] focus on mobile money transfers makes sense. These applications are gaining good traction with consumers, particularly in emerging markets where Facebook has ambitions to be the prime platform from which people access and interact with Internet services.” The company has a user base of over 200 million in Asia.
Still, entrusting a social network with one’s money is a different matter. Zoller cites Ovum research that showed only 1% of consumers surveys trusted Facebook with m-payments, while banks were trusted by 43%. Previous m-payment schemes from Facebook, namely Facebook Credits and Facebook Gifts, have met with a tepid response.