You are not logged in. LOG IN NOW >

Facebook Seeks Approval as Financial Service in Ireland. Is the Developing World Next?

BY Jessica McKenzie | Wednesday, April 16 2014

Mark Zuckerberg (Brian Solis)

On April 13 the Financial Times reported that Facebook is only weeks away from being approved as a financial service in Ireland. Is this foray into e-money motivated by Facebook's desire to conquer the developing world before other corporate Internet giants do? Maybe.

“Facebook wants to become a utility in the developing world, and remittances are a gateway drug to financial inclusion,” a person knowledgeable about Facebook’s strategy told the Financial Times.

E-money is less than a hop, skip and jump away from mobile money, which is widely used, sometimes more than traditional banking, in parts of the developing world.

Other Internet companies in the race to become the dominant mobile money provider include Google and China's Tencent and Alibaba.

"For remittance alone the market is worth around $500bn, according to the World Bank,” Taavet Hinrikus, co-founder of the payment service TransferWise, which is reportedly talking partnership with Facebook, told The Guardian. “For money moved between developed nations, as well as between developed and developing individuals and business, the market is valued at an estimated $5tn to $10tn, based on our analysis of global money flow data."

"It is quite encouraging that serious players like Facebook are beginning to pay attention to what was once considered sort of a dirty business, because it involved dealing with poor people and sometimes undocumented migrants," Dilip Ratha, manager of migration and remittances at the World Bank, told SFGate.

Personal Democracy Media is grateful to the Omidyar Network and the UN Foundation for their generous support of techPresident's WeGov section.

For a round-up of our weekly stories, subscribe to the WeGov mailing list.