Facebook to Double as a Bank? Only Weeks Away From Getting Approval

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A man is silhouetted against a video screen with an Facebook logo
A man is silhouetted against a video screen with an Facebook logo REUTERS

Facebook is planning to diversify its horizon beyond social networking. The social medai site is set to obtain regulatory approval to offer its avid users a mobile payment facility, including remittance, transfer, storing/saving money and electronic money assistance via Facebook.

According to Financial Times, Facebook is weeks away from getting the required approvals for "electronic money service" (e-money) in Ireland. This would enable Facebook to operate across Europe.

Also, Facebook is in talks with several international money-transfer startups about the potential partnership to help with the payment platforms. Apparently, the long-term goal of Facebook is to offer the new service in developing countries where the social networking giant has a humungus presence and that could elevate the chance of becoming a part of their financial infrastructure.

According to FT, "Facebook wants to become a utility in the developing world, and remittances are a gateway drug to financial inclusion."

Facebook gets an unspecified percentage out of every app purchase within Facebook, which translates to the social networking giant amassing a cut on any in-app purchases developers charge their customers, amounting for about 10 percent of Facebook's overall revenue, BGR reported.

No other social networking site has walked down this road before. Hence, Facebook might become the pioneer in coupling both social and financial day-to-day dealings under one roof.

If Facebook could establish stability and consistency then there might be a huge shift in this arena. According to Mashable, this was not the first time Facebook has tried something in the e-payment sector. "Facebook Credits," which were intended for apps and games were the first. Due to bad response, the app was put to rest. Apparently, Facebook's stock surged to more than 2 percent on Monday after this news.

Facebook has been on a diversification spree for quite some time now. With its acquisition of WhatsApp for a whopping $19 billion in the mobile instant messaging sector, DeepFace for Facial Recognition Technology, Oculus for Virtual Reality advancements, the investments have been phenomenal.

Search giant Google has a mobile payment platform named Google Wallet already in place but the response has not been impressive. Also, Apple's Tim Cook said the company's interest in mobile e-solution was one of the reasons for the introduction of touch ID fingerprint sensor in its iPhone 5S.

Apparently, neither Facebook nor the Ireland Central Bank would comment on this new development.

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