NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, April 21, 2014

Facebook is a digital landscape filled with memes, selfies and cat pictures. The social media behemoth does not conjure up visions of a vibrant payments ecosystem, though, especially with its past failures. But that might be about to change.

Facebook made waves in the payments industry earlier this week when the Financial Times reported the company is weeks away from obtaining an e-money license in Ireland. The license would enable Facebook users in the country to store funds on the network and transfer funds to others through the site’s online portal or mobile application. The company is not publicly commenting on the license. Facebook, however, might have a difficult time convincing 1.3 billion users it is capable of handling such an endeavor should the license come to fruition.

“The question is, ’Should Facebook be chasing payments at all?’ and I don’t know if the answer there is clear,” Ben Jackson, a senior analyst with Mercator Advisory Group, told Mobile Payments Today. “I’m not sure what it gets them.”