Being the largest online social network with more than 1 billion users, Facebook is always looking for more ways of leveraging this audience. Reports now have it that the company is now planning to roll out its very own e-money service.
The reports are backed by the fact that Facebook has gained Monetary Services Business (MSB) licenses in 48 U.S. states and is said to be on the way to gain a monetary services business approval in Ireland as well. The big question, however, is whether or not such a service would be successful.
The question of privacy:
Where there’s mention of Facebook, there are questions about privacy. The social network has attracted frequent criticism about its knack for gathering endless information about its users. Some have called this a dangerous trend whereby such data is used for commercial purposes.
In view of this, it is plausible to ask whether an e-money service from Facebook will really fly. Are people really secure enough to store their financial and credit card information on Facebook to make use of this potential e-money service? And if so, will Facebook either mint a fee on the transactions or will it leverage the financial information for other purposes?
Some analysts have predicted that an e-money service from Facebook has little chance of success in regions such as the U.S. or the Europe. With heightened concerns about online privacy, users in these areas are already on the alert and will consider such a service from Facebook as yet another tool of gathering important information from them.
However, there are regions where privacy is not yet a huge concern and monetary services are rare and few. These particularly include many Asian countries where people are beginning to prefer more cutting-edge monetary services rather than use traditional means. For instance, while many people in countries such as India are more readily open to an online monetary service, they wouldn’t sign up for a regular credit card.
Not only that, in many Asian markets, regular banking services are either expensive or entirely unavailable. Facebook can push its e-money service in these areas and garner significant success. However, any Asian ambitions that Facebook has, will have to exclude the huge Chinese cyberspace where the social network is banned.
How will the service work?
It remains unclear exactly how Facebook plans to position the e-money service. Chances are the the social network will tie in the service with retail giants, both local and online. This model has previously been implemented by some other companies. But with its huge customer base, Facebook has a good shot at success if it makes the right moves.