Would You Use Facebook As A Bank? Because They’ll Be Asking You Soon
IT looks like Facebook is going to open itself up as something of a bank. Why not, they’ve a billion users already and that could make them the largest bank in the world by a long way if they can pull it off. They’re starting over here in Europe too:
Not content with being just a platform to host cat photos and status updates, Facebook is readying itself to provide financial services in the form of remittances and electronic money.
The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process.
It all sounds a little odd I agree but seriously, this is a large game changer. They’re starting with the idea of being able to be a money transmission service. A little like Western Union say, or PayPal as an electronic version of it. And the problem with all such attempts to do these things is that you’ve got to set up the network. It costs you tens of millions, hundreds of millions, to get ready to be able to do all of these sorts of things. Send money around, get the right licences and so on. And when you start of course you’ve got no damn customers having spent all that cash already.
But if you’ve already got a billion customers then those costs become more manageable. Because you’ve already got the people you can sell your new services to.
And more than that, think through what migrants already use Facebook for. They use it to keep in contact with people back home. And who are the people who are the largest senders of money internationally? That’s right, migrants, and they get charged a fortune for doing it too. So, you’ve already got both ends of this network on Facebook: all you’ve got to do is get the lience to be allowed to transmit money between them.
This could be a very big service indeed.