Online payments for FB Marketplace rolls out in Europe
20 Jan 2017
Payments via Facebook Messenger have come to Europe, bringing closer the possibility that online payments will soon become part of Facebook Marketplace.
Earlier this month, Facebook received a license to issue electronic money in Spain under the registered name “Facebook Payments International Limited.”
Facebook began allowing its U.S. members to transfer money to each other via Messenger already back in 2015. The money goes between members via their debit cards. The interface is simple — you tap the $ icon within a conversation, then the amount you want to be transferred. Payment can take a few days to clear depending on the bank.
The U.S. launch took place before Facebook announced Marketplace, however. In light of Facebook’s intention to compete with general classified apps, such as OfferUp and LetGo (not to mention established players such as Craigslist and EBay), the Messenger payment service — rather than just a way to pay your buddy for movie tickets — now holds significantly more potential as a way to facilitate safer buying and selling on Facebook Marketplace.
The Spanish e-money license (Facebook is only the fifth entity granted such permission in Spain) is actually the result of a license received by the Central Bank of Ireland in December 2016. Reciprocal EU agreements mean that all Facebook had to do was notify the Bank of Spain of its license in order to become a registered e-money entity in Spain.
AIM Group analyst Cila Warncke provided further details.
Facebook joined four other e-money entities in Spain, she wrote:
- Catalan bank Caixabank (which also runs a major investment fund which invests in online classifieds);
- Kuantia, a Grand Canary-based electronic payments firm;
- Madrid-based Pecunia Cards, which serves small and medium-sized business clients; and
- Sefide EDE, a company in Grenada, Spain.
Facebook isn’t the only online operator to be offering an e-payment option, Warncke added. Frode Nordseth, CEO of Schibsted Spain, which owns the country’s top generalist sites Milanuncios.com and Vibbo.com, as well as leading verticals Fotocasa.es, InfoJobs.net and Coches.net, said “Schibsted has obtained an EU-wide license as well — so Schibsted Spain already has this e-money entity license.”
Nordseth declined to say whether Schibsted Spain has immediate plans to incorporate e-money into its classifieds. “I am not sure if Facebook has obtained the e-money entity only to support its classifieds operation,” he noted. “A lot of different players have these licenses.”
The Spanish daily El Pais concurs that Facebook’s plans for Europe are not entirely clear. “Facebook has yet to explain how it plans to roll out the service in Spain and the rest of the euro zone,” the paper wrote.
Facebook meanwhile, has spun the e-money license in a much more charitable way. In response to a query by TechCrunch, Facebook wrote in an email:
The license enables us to roll out products, such as charitable donations on Facebook, or peer-to-peer payments via Messenger in Europe, as we have in the U.S. The license authorizes FBPIL to issue donations from Facebook users to charities registered in the European Economic Area (EEA) only; and peer-to-peer payments, within the EEA.
Facebook isn’t the only company seeking to bring online payments to Messenger. In November, we reported on Israeli start-up PayKey, which had raised $6 million U.S. for a mobile phone “payment keyboard” that is linked to your bank account. PayKey’s solution isn’t limited just to Facebook and can be used on other social media services.
Still, with the start of its own European e-money rollout, is Facebook signaling it wants to ensure that money transfer functionality stays within the Facebook ecosystem? Should banks be worried?
“Is Facebook Messenger going to offer money transfers in all EU currencies, or only in euro? Will the service be available for cross-border transactions within the same currency (e.g. euro in France > euro in Germany), or extended to cross-currency transfers (e.g. GBP in the United Kingdom > euro in Spain)?” asks François Briod, founder of money transfer comparison site Monito.
Facebook’s Irish license applies throughout all 27 EU member states, with Facebook only needing to notify the respective central banks to validate the authorization.
Expect to see more Facebook e-money announcements roll out across Europe in 2017.