Would you trust someone who freely sells your most private information, such as your phone number, email address, place of work, friend’s names and so on, to look after your money? If the answer is no, then you probably won’t be using Facebook’s money transferring service if and when it officially rolls out.
Yep, Facebook is looking to introduce a financial service that will allow its users to send, transfer, receive money directly on the site. According to a report from the Financial Times, Facebook is weeks away from getting the necessary regulatory approval which will allow it to launch an e-payment service in Europe, as well as pushing its way into the remittances market to appeal to migrant workers in developed economies.
Facebook’s European headquarters is located in Ireland, and the social giant is waiting for that country’s central bank to approve it as a legitimate electronic money institution.
Facebook previously launched Facebook Credits, a virtual currency which you can use to purchase goods on the site or in games it hosts. It’s complicated because Facebook users have to purchase a virtual currency to be able to purchase a second virtual currency that’s used in some games. Facebook has dumped this cack-handed method and now allows users to pay with their credit or debit cards, PayPal, and even gift cards. By launching a financial service, it will allow Facebook to compete with the likes of PayPal, banks, and even money-transfer services such as Xoom, Western Union, and MoneyGram, which all charge fees to send remittances.
If Facebook can offer lower fees than other money-transfer services, its service will be seen as a viable option for migrant workers who send money to their families in other countries. That’s because Facebook is already recognized as a major global brand, something that millions of people use on a daily basis.
In the US, Facebook has already obtained a Money Services Business license in 48 US states, which means it can legally launch a financial service in the US today if it chooses to do so.
Facebook haters gonna hate!
The only thing that seems to be standing in Facebook’s way is its user’s trust.
Since its inception, and every time a new feature is introduced, someone somewhere always seems to find a security flaw which leads to users being put at risk of getting hacked. There are other problems too, such as Facebook being accused of complicity with the NSA, and it’s practice of tracking users even when they logged off the site.
If you ever get annoyed with all the ads you see on Facebook, but notice that the ads are usually of something you recently looked at, you might’ve guessed that Facebook is tracking your browsing activities and selling that data to advertisers so they can deliver targeted ads. As a result lots of people find it hard to trust Facebook, and that begs the question, will users let it handle their money when they can’t even trust it to not sell their personal information to advertisers?
Some people probably won’t care anyway, so long as Facebook offers a better rate than the likes of PayPal etc. However, it may need to clean up its reputation a bit if wants its more paranoid users to trust it with their hard earned cash.