Facebook has, according to the Financial Times, been working on getting authorization from the central bank of Ireland to become an “electronic money institution,” and they are getting close to approval. This is necessary for the social giant to start processing transfers and payments throughout all of Europe. The services they are likely to offer are similar to what PayPal has, with instant transfers of money.
Most people expect, however, that rather than competing directly with PayPal for the money transfers in the developed world, they will be going after what has largely been a neglected market for many years. Money transfers to and from poor and developing nations.
Billions of dollars each year are sent from Europe to countries like India and other countries. Primarily the money is from people who move to Europe to work, and send money back to their families. In the past, it was very expensive to send this money through traditional banks (as much as $21 to send $200). Since Facebook is already well adopted in many of these countries, like India where they have over 100 million users, they likely feel that they could easily enter this huge market.
It is rumored that Facebook is also talking with TransferWise, a fairly new company founded by Taavet Hinrikus (the first employee of Skype) which offers these types of transfers. They have already helped to bring the cost of transferring money down dramatically (as low as $1 to send $200). It takes a couple days, however, for the money to be sent. A partnership with Facebook could streamline this process, and have money available instantly to people around the world.
What does this have to do with performance marketing and online business? If this goes through, it has the potential to generate millions, or even billions of dollars per year in the digital space. Granted, the bulk of this money will be used for normal ‘day to day living’ expenses, but it will help bring many people from third world countries to the table as potential customers.
They will likely already have money in their online Facebook “bank” accounts, which they will be able to use to make purchases of physical or digital products. In addition, working directly with people as virtual assistance or contractors will likely become much easier as well. This is certainly something that all marketers will want to keep an eye on over the coming months, as Facebook gets closer to getting approval.
