The Financial Times reports [6]:
[Facebook] 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.
The authorisation from Ireland’s central bank to become an “e-money” institution would allow Facebook [7] to issue units of stored monetary value that represent a claim against the company. This e-money would be valid throughout Europe via a process known as “passporting”.
Facebook has also discussed potential partnerships with at least three London start-ups that offer international money transfer services [8] online and via smartphones: TransferWise, Moni Technologies and Azimo, according to three people involved in the discussions.
In the case of Azimo, Facebook offered to pay the company $10m to recruit one of its co-founders as a director of business development, according to people familiar with the situation.
Yes, this space is heating up. It makes me feel good! You see, the Visas, Mastercards, Western Unions and Paypals of the world make a lot of money selling a relatively cheap services for a relatively large amount. BUT!!!! The Goldmans and JP Morgans of the world make much more money by selling very deep margined products and services for a lot more while paying a lot less to create them. It is here where UltraCoin has staked its ground. As the competition amongst the big boys starts to heat up, they will want to crawl up the food chain and I already have the ladder built!
“Facebook wants to become a utility in the developing world, and remittances are a gateway drug to financial inclusion,” said a person familiar with the company’s strategy. Facebook recently passed 100m users [9] in India, which is its largest national market outside the United States.
My last post on this topic illustrated how UltraCoin will operate in developing markets by allowing currency, stock and financial asset exposure trades of anywhere from $5 dollars to $5 million, as well as sending money to others for just a little more than nothing, as excerpted from "Hardware IS Dead" Thesis Has Now Torn Through All Handset Providers & Now Everyone Can Act On It [10]:
I've created an infrastructure that significantly expands these investment markets by allowing anyone, anywhere with an Internet connection (of almost any speed) to participate in almost any of the world's public financial markets. Taking the subject matter of this article into consideration, we can short Samsung on its own home exchange of Korea for nearly any amount, from $10 million US down to $8 ...
Back to the FT article:
It also comes as other internet groups – in particular, China’s Tencent [11] and Alibaba – race to turn their sites into mobile payment platforms.
Google [12] has reiterated its commitment to expanding its mobile payments and wallet products, which have yet to be widely adopted by consumers. It is registered in the UK to issue electronic money, in a process similar to the authorisation which Facebook is seeking in Ireland.
In 2013, the company [Facebook] facilitated $2.1bn worth of transactions, almost exclusively from games, according to documents filed with the Securities and Exchange Commission.
Vodafone [13] has acquired an e-money licence for the phone company to operate financial services in Europe.
“It’s great news that non-banks are challenging the traditional banking monopoly,” said Simon Deane-Johns, a UK-based lawyer and European payments expert at law firm Keystone Law.
It will be interesting to see how the potential bidding contest will form as these companies compete to build the next generation financial infrastructure. I believe that I am very well positioned, as excerpted from yesterday's missive:
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