Who would have predicted that social media websites would develop the status of being the easiest way of staying connected to the people in your life? This reputation is largely thanks to one website, not known to be the first of its kind, but now is the most widely used networking platforms on the World Wide Web. Founder Mark Zuckerberg, who turned 30 yesterday, created Facebook in 2004, after the formation of MySpace, and Friendster. However, unlike the others, Facebook now virtually dominates the way in which we communicate, keep in touch, and share our lives with our family and friends. But for the last few years, Facebook has been hinting that they are gathering speed for something else – something new.
I suppose it all started in 2010 when Facebook went public and released their IPO at 35 USD. Facebook has been involved in acquiring big, medium, and small enterprises that have enhanced the Facebook experience. The most notable purchase came in January 2014 when they acquired What’s App; the multi – platform instant messaging service that has over 500 million users, for 19 billion USD. A few years prior in 2012 they purchased Instagram, the comment-only photo sharing website, for 1 billion USD. It’s clear that these acquisitions have contributed to the steadily improving stock price in the last 3 years. Now, those in my circle that bought shares four years ago are now anticipating fatter wallets due to the new adventure Facebook is about to embark upon– Financial Services.
Facebook is only weeks away from being granted regulatory approval from Ireland to provide a service that allows its members to bank money. Users can then use it to purchase, exchange or send to other members. This in essence would transition the social networking site into an “e-money” institution; where people would be able to use units with monetary value that have been stored within the institution. This has the makings of developing into a new pillar of Financial Services. Facebook could still quickly become a leader in the space due to its large quantity of members, and user-friendliness compared to other sites that provide a similar service,
According to legal experts, in order for Facebook to match regulatory requirements and become an e-money institution, they need to hold close to £286,000 in capital, and equivalent separate funds to match the e-money it issues. Something tells me that with cash reserves reaching into the billions – that shouldn’t be a problem.