Breaking News Comment
According to the Financial Times, Facebook is just ‘weeks away’ from getting an e-money license in Ireland that would allow its users to hold and exchange money on the social networking site.
Eden Zoller, m-payments experts at Ovum explains the rationale behind this move:
“Ovum predicted Facebook would launch a renewed push into mobile payments this year* and its focus on mobile money transfers makes sense. These applications are gaining good traction with consumers, particularly in emerging markets where Facebook has ambitions to be the prime platform from which people access, and interact with Internet services. Facebook’s user base in emerging markets is growing fast (some 200m in Asia alone at Q4 2013) but when it comes to mobile payments and financial services, Facebook will have its work cut out and the biggest challenge will be consumer trust. Ovum’s 2013 Consumer Insights found that only 1% of respondents trusted social networks like Facebook to deliver m-payments, in sharp contrast to the much higher levels of trust placed in banks (43%) credit card companies (13%) and mobile operators in the context of emerging markets (11% in China)**. It also remains to be seen how well Facebook will execute m-payments given its poor track record with m-commerce applications. The Facebook Credits virtual currency got nowhere and was wound down last year, while the main m-commerce offering in place today, Facebook Gifts, has so far received a muted response from consumers.
NOTE TO EDITORS
To speak to Eden in regards to this comment, please contact: Claire Booty on +44 (0) 20 7017 7916, or email Claire.Booty@ovum.com
Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is an Informa business.