Irish E-Money License Could Make Facebook a P2P Force in EU
Facebook has received a key license that would enable the social media giant to bring its Messenger P2P service to Europe. The Central Bank of Ireland quietly granted an e-money license to Facebook Payments International Ltd. in late October, the company confirmed in a statement to TechCrunch, paving the way for the potential launch of Facebook’s Messenger-based money transfer service throughout the EU’s 28 member nations under passporting rules. The service has been available throughout the U.S. since July 2015.
“The license enables us to roll out products like charitable donations on Facebook or peer-to-peer payments via Messenger in Europe, as we have in the U.S.,” Facebook told TechCrunch. Specifically, the license pertains to e-money issuing and payment services and includes credit transfer, payment transactions and money remittance. The company didn’t provide details as a time frame to bring the service to the EU, nor did it reveal whether a European money transfer service would enable transfers to be made and received in different currencies in cross-border transactions.
The launch of Facebook Messenger payments could provide a shot in the arm for the European mobile P2P market at large, which has seen slower take-up by consumers compared to the U.S., according to observers. While services such as Paym and Barclays’ Pingit have carved out a niche, the market remains fragmented, with no major, ubiquitous players—something that would change should Facebook arrive on the scene.
Meanwhile, Facebook’s decision to base its EU license in Ireland could serve as a signal that companies already are beginning to steer clear of the U.K. as a basis for passporting in the wake of the Brexit vote. The U.K. has long been a favorite home base for e-money and payments providers seeking to do business throughout the EU. Approximately 75 percent of such companies operating in Europe do so on the basis of a license from the U.K.’s Financial Conduct Authority, according to regulatory and compliance specialist Neopay. However, the country’s decision to leave the EU has roiled the waters considerably, creating concern about the future of what a U.K.-based license means for businesses that want to operate in the rest of the EU.