eMoney – a game changer?
The Financial Times has reported on Facebook’s moves into electronic payments in Ireland – with regulatory approval for an “emoney” license being rumoured to be only weeks away. With approval in Ireland this means that under EU regulations the same solution could be relatively quickly introduced across the whole of Europe without further approvals.
When combined with its recent acquisition of What’s App it is becoming very clear that Facebook is positioning itself for a major presence on mobile. The Financial Times article also speculates that Facebook is looking to establish migrant remittance services as part of its push into emerging markets.
Forbes has also reported from a source that there is a 50-50 chance they will launch a successful business and “they are making up their minds on what to do”.
What’s the potential impact on insurance ?
At The Digital Insurer we recently released an analysis of the AXA Facebook tie up (see article). Whilst there appears to be no commercial linkage between these two news items it is becoming clearer that the addition of a payments platform on Facebook would help to enable the sale of simple and straightforward insurance products. If I was an AXA executive I would be pushing to quickly extend my relationship with Facebook into the distribution arean whilst if I was an insurance competitor I would be beating a path to Facebook’s door.
And if I were at Facebook? I would be sitting back,taking my time and devising a consumer focused financial services proposition. Clearly an emoney platform has broad implications for Facebook’s ecosystem beyond financial services so I suspect that Facebook’s initial focus will be on delivering a crisp and friendly payments service to consumers and getting as many people signed up and using the service as possible.
What’s the potential impact on retail banking?
If I was a bank I would be even more worried. If Facebook can establish its eMoney platform with critical mass in Europe it will then be able to steadily build out a broader retail banking proposition. Scratch, a unit of Viacom, reported more than 70% of millennials would prefer to visit their dentist than visit their bank – so Facebook is pushing on an open door.
When combined with the Edelman Trust Monitor survey (see slideshare immediately below) that indicates that Technology companies are the most trusted brands whilst banks are just about the least trusted we can see that Facebook’s move is well timed and could have far reaching consequences in the financial services industry.
Editor’s note: The Digital Insurers views in this article are their own and are based on publicly available information and our understanding of industry trends.