It’s been reported that Facebook is close to receiving authorisation to become an “electronic money institution” in Europe. You may be asking why the social media giant is getting into the banking game? Well, for more money of course.

Facebook is in the process of getting the go ahead from Ireland’s central bank to process transfers and payments throughout Europe. There are plenty of non-bank financial institution propping up these days that are specifically targeting the transfer of money.

Experts think that Facebook might be targeting migrant workers as their customers – those who work in the developed world and send money back home to their families. This market is ripe for service improvement. Banks currently charge a large sum for these transfers. For example, sending money back to the “corridor” that runs from South Africa to Zambia, it costs R220 to send R2,100.

According to the World Bank, India is the biggest recipient of transfers from migrant workers. Residents in India received a total of $71 billion last year. Facebook already has about 100 million users in India and if they could offer a cheaper way of transferring money from Europe to India, Facebook stands to earn a lot of cash.

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[ Source : MoneyWeb ]