MICROCAPITAL BRIEF: Facebook Seeks Regulatory Approval from Central Bank of Ireland to Provide Remittances, Mobile Money Throughout European Union

Facebook, a US-based social networking company, reportedly is waiting for approval of its application to the Central Bank of Ireland to become an “e-money” institution, which would allow it to provide remittances and mobile money services throughout Europe through a structure known as “passporting”[2]. The approval would allow Facebook users to store money online, pay for online merchandise, exchange with other Facebook users and convert credit back into cash. “E-money” authorization would be contingent upon Facebook holding capital of EUR 350,000 (USD 483,000) in addition to funds equivalent to the amount of e-money issued. An unnamed person familiar with Facebook’s strategy reportedly said that “Facebook wants to become a utility in the developing world, and remittances are a gateway drug to financial inclusion.”

Facebook is already authorized to facilitate money transfers relating to online purchases in the United States. In 2013, Facebook completed user transactions totaling USD 2.1 billion, of which the company took a fee of 30 percent that accounted for approximately 10 percent of its total revenue.

Facebook Inc reported total assets of USD 17.8 billion and 1.23 billion total users as of 2013.

By Juan Blanco, Research Associate

About Facebook Inc

Facebook is an online social networking service that was founded in 2004 and is headquartered in the US city of Menlo Park, California. In 2012, Facebook raised USD 5 billion through an initial public offering. The company reported total assets of USD 17.8 billion and 1.23 billion users as of 2013.

Sources and Additional Resources

[1] The Irish Times, “Facebook seeks Irish approval new for e-money service,” April 14, 2014, http://www.irishtimes.com/business/sectors/technology/facebook-seeks-irish-approval-new-for-e-money-service-1.1760908

[2] Financial Conduct Authority, “Passporting FAQs,” April 2014, http://www.fca.org.uk/firms/being-regulated/passporting/passporting-faqs

[3] The Guardian, “Facebook prepares to launch e-money transfer service in Europe” by Samuel Gibbs, April 14, 2014, http://www.theguardian.com/technology/2014/apr/14/facebook-e-money-transfer-service-europe

MicroCapital Story, March 25, 2014, “Accel Invests $40m in Equity in UK-based WorldRemit, Provider of Remittances to 100 Countries,” https://www.microcapital.org/microcapital-brief-accel-invests-40m-in-equity-in-uk-based-worldremit-provider-of-remittances-to-100-countries/

MicroCapital Story, March 20, 2014, “MoneyGram, Vodafone Partner to Enable Global Mobile Money Transfers Via M-Pesa,” https://www.microcapital.org/microcapital-brief-moneygram-vodafone-partner-to-enable-global-mobile-money-transfers-via-m-pesa/

MicroCapital Story, March 18, 2014, “Tigo Introduces Cross-border Mobile Money Transfer Service With Currency Conversion Serving Rwanda, Tanzania,” https://www.microcapital.org/microcapital-brief-tigo-introduces-cross-border-mobile-money-transfer-service-with-currency-conversion-serving-rwanda-tanzania/

MicroCapital Story, February 25, 2014, “Telecel Zimbabwe Introduces Debit Cards, International Remittances Via Telecash Mobile Banking Service,” https://www.microcapital.org/microcapital-brief-telecel-zimbabwe-introduces-debit-cards-international-remittances-via-telecash-mobile-banking-service/

MicroCapital Story, May 22, 2012, “Online Microfinance Firm Lenddo Receives $8m in Equity to Support Its Lending in The Philippines, Colombia,” https://www.microcapital.org/microcapital-brief-online-microfinance-firm-lenddo-receives-8m-in-equity-to-support-its-lending-in-the-philippines-colombia/

MicroCapital Story, May 30, 2007, “Facebook Launches a Person-to-Person Lending Service,” https://www.microcapital.org/news-wire-facebook-launches-a-person-to-person-lending-service/

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