Facebook renews push into mobile payments

APRIL 16,2014.

CIOL.

Facebook is just 'weeks away' from getting an e-money license in Ireland.

According to the Financial Times, Facebook is just 'weeks away' from getting an e-money license in Ireland that would allow its users to hold and exchange money on the social networking site.

Eden Zoller, m-payments experts at Ovum explains the rationale behind this move: "Ovum predicted Facebook would launch a renewed push into mobile payments this year* and its focus on mobile money transfers makes sense. These applications are gaining good traction with consumers, particularly in emerging markets where Facebook has ambitions to be the prime platform from which people access, and interact with Internet services.

"Facebook's user base in emerging markets is growing fast (some 200m in Asia alone at Q4 2013), but when it comes to mobile payments and financial services, Facebook will have its work cut out and the biggest challenge will be consumer trust.

"Ovum's 2013 Consumer Insights found that only 1 percent of respondents trusted social networks like Facebook to deliver m-payments, in sharp contrast to the much higher levels of trust placed in banks (43 percent) credit card companies (13 percent) and mobile operators in the context of emerging markets (11 percent in China).

"It also remains to be seen how well Facebook will execute m-payments given its poor track record with m-commerce applications. The Facebook Credits virtual currency got nowhere and was wound down last year, while the main m-commerce offering in place today, Facebook Gifts, has so far received a muted response from consumers."