On Monday April 14th, Facebook announced that it wants to now become a money transfer business on top of everything else. Whether or not this has been in talks for over a year within the company, this is another move for Facebook to potentially take over the world. What’s next? Will Facebook attempt to create a new currency?
“Such a business would draw on Facebook’s extensive user base and existing mobile reach, but analysts are warning that success could depend on establishing a new level of user trust. Launching such a service extends what is perceived as the normal reach of social network companies and furthers the business concept of a ‘one-stop shop’ for online money and communication needs,” proclaims a Forbes article.
Companies like PayPal, Western Union and Moneygram are leaning on the support that they have always had as a trusted operation with millions of customers already. However, this move by Facebook makes a lot of business sense. They can eventually become a reliable financial utility and it would only help Facebook’s profits grow even more. With the advantage of its user base, Facebook will still need to gain trust in order to make this new plunge a success.
According to the Huffington Post, “the company is close to obtaining approval from the Central Bank of Ireland to start a service that would allow users to store money on Facebook and use it to pay and exchange with others.”
Facebook has also talked with companies like TransferWise, Moni Technologies, and Azimo, three London start-ups that offer online and mobile international money transfer services. While there does not seem to be much more information out to the public, it will be interesting to see the different traits Facebook will have with their money system compared to what Google has to offer with Google Wallet, which is mentioned to be in a revamping stage. Apple has also said in January that their interest in mobile payments was a reason for creating the Touch ID fingerprint sensor in the new iPhone 5s.
Should we be concerned about these new markets that are being broken in to? The answer is yes. The reason for this is because “global mobile transactions are expected to grow at an average 35 percent per year between 2012 and 2017, according to a report by research firm Gartner. The June 2013 report forecast a $721 billion market with more than 450 million users by 2017.” As Google Wallet has been in the picture, Facebook’s commitment to expand by creating their money transfer service is a great possibility at this point.
An article on venture beat talks about how Facebook shows it will take over the rest of the world in 2014. Along with many other aspects within the company, they wanted to become the world leader in the mobile market. “The company now considers itself a 100 percent mobile platform—and it’s paving the way for 100 percent mobile revenue, too,” and “watch the entire mobile web achieve rapid acceleration as Facebook open-sources more tools for building perfect mobile websites.”
With Facebook’s own perfect mobile website, this may give them an edge to gain consumers to use their financial utilites in the future. Facebook is truly changing the rules of the game. While Google may have their search engine power, they lack the social media aspect with Google+. As the number of mobile active users continues to increase for Facebook, they are really taking a chance to break the barrier with this service. But with the advantage in this situation, Facebook will potentially allow the money service to be a common use among everyone in the world one day.