Over the last year, Amazon took some significant steps forward in the payments world. It looks like Facebook is following the same path – the social networking giant is currently waiting on an approval from the Central Bank of Ireland in order to begin their mobile payments service. This is HUGE!
Previously, Facebook has tried to enter the world of payments via Facebook Credits in 2011 and Facebook Cards. These systems did not catch on as the company would have liked. The company also partnered with PayPal to enable users to link their credit card information to Facebook login, making online purchases much quicker.
Last year, the company acquired almost $900 Mn via fees charged on transactions through the social network. This usually applies for in-app purchases on their video games. The company takes a 30% cut of app payment revenue generated by any game on Facebook. However, most of the company’s revenue is still obtained through advertising which is why Facebook is so keen to enter the payments industry.
According to World Bank, an estimated $515 billion will be transferred by the US immigrants to their respective countries by 2015.I recently wrote an article describing 7 Mobile remittance platforms that enable transfer of money via Social media. A number of them had already integrated with Facebook. It is now in talk with startups such as Transferwise, Moni technologies and Azimo.
The acquisition of WhatsApp could play a major role in Facebook’s bid to enter into and monopolize payments globally. Remember how WeChat’s new year red envelope went viral? Their vast reach of 1.2 Billion people is another factor that should not be taken lightly.
What could be more beneficial than having all these people send each other money via Facebook, while the company takes a small bite out of each transaction. Imagine being able to monopolize all online purchases globally. Well that’s what we are looking at if it is successful with their latest attempt. There's certainly a chance that Facebook could become the preferred payments platform.