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April 14, 2014

Facebook gearing up to launch ‘e-money’ financial services

Social media giant is currently awaiting regulatory approval to launch in Ireland.

By Vinod

Facebook is reportedly close to taking its first step into financial services, it has been claimed.

The social media giant is apparently only a few weeks away from getting regulatory approval in Ireland to launch a service that would let users store money on the site, and then use it to pay others, according to the Financial Times, which cites several people involved in the process.

Authorisation from Ireland’s central bank to become an "e-money" business would allow Facebook, which has its European headquarters in Dublin, to issue monetary units that represent a claim against the company. This e-money would then be valid throughout Europe via a process known as "passporting".

"Facebook wants to become a utility in the developing world, and remittances are a gateway drug to financial inclusion," said a source familiar with the company’s strategy.

Facebook has apparently held talks with at least three London start-ups that offer international money transfer services online and via mobiles, with TransferWise, Moni Technologies and Azimo being consulted about a possible partnership, the FT quotes three people involved in the discussions as saying.

Led by Sean Ryan, Facebook’s VP of platform partnerships, the ‘e-money’ transfer project signals a strategic shift for the company, which currently makes most of its money from advertising. The company launched an update today has looked to clamp down on advertisers who spam users with unhelpful content.

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Such a move would help Facebook increase its presence in emerging markets, and comes a week after it announced it had topped 100 million users in India, one of the most valuable markets around.

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