Social networks in general these days are something of a declining proposition. As new competitors come into the picture, and offer new services or a more interesting crowd or any of several potential market advantages, the exodus of users to these new services can spell trouble for a social network unaided; just ask Twitter and its 974 million registered users...or rather, its reported 244 million active users. But Facebook (News - Alert) has been looking to branch out from just the social network for some time, and now, reports have emerged to suggest that an e-money service may be part of the picture in the near term.
Facebook is, at last report “weeks away” from landing the approval of Irish regulators that would allow for the launch and operation of said e-money service. Said service would allow users to not only store money with Facebook operations, but use said money to pay others. Essentially, the stored money would represent a claim against Facebook itself, and the e-money could then be paid out accordingly. Additionally, Facebook has been seen talking to three separate startups in London to bring in international money transfers, though for its part, Facebook isn't “commenting on rumor or speculation.”
The more services that a social network can offer—particularly if said services work with other services already in place—the better its chances are of being relevant to other users. Some have noted that bringing e-money and international money transfer services would be very useful, particularly in places like India and China. Major names in the Chinese Internet realm like Tencent and Alibaba have brought out such payment systems, and with Facebook reportedly clearing 100 million users in India, it's a point that could prove valuable, and thus retain both users and advertisers who want to reach said users.
With Facebook already being abandoned, according to some reports, it's going to be imperative that Facebook find some alternatives to bring under its umbrella. Facebook's recent improved focus on mobile services has been a help for it already, reaching an audience that was formerly part of its desktop operation as well as some new users besides, but Facebook may have an even better idea here in the form of a complete mobile wallet system if it can get such a thing operational.
Consider this idea for a moment: Grandma needs to send little Joey a birthday present, but Grandma's living it up in Boca Raton while little Joey is in Tucson. So she jumps on Facebook and drops a quick $20 into his Facebook account. Little Joey, in turn, can send a thank-you post within minutes—yes, not strictly Emily Post, but it's coming into vogue—then turn around and go shopping with his mobile device. Maybe he hits Amazon, maybe he goes to his nearest Gamestop, but either way, little Joey can enjoy Grandma's birthday largesse in rapid fashion, and Grandma never had to hop a flight or hit the post office so to do. The entire operation, meanwhile, took place right on Facebook, with Facebook netting a quick fee for handling the $20 and providing the infrastructure.
It's all very much a possibility, though like all possibilities, only time will tell just what form the reality actually takes. Still, there are several clear routes—and likely several more that haven't even been considered yet—that Facebook could take, and Facebook's clearly proactive stance should give its investors an extra note of courage on the markets.
Edited by Alisen Downey
Back to Mobile Commerce Insider Home