The Spanish banking sector looks set to have another problem on its hands: Facebook has obtained a license to manage money transfers between individuals in Spain. The social media giant has secured the authorization in Ireland, opening the door to the rest of the European market, according to a company release.
After informing the Bank of Spain, Facebook is now on the financial institution’s registry of electronic money agencies.
The Palo Alto firm joins a market that the traditional banking sector is trying to defend from competitors including Paypal and Apple.
Facebook is the world’s largest social media network: it counts on 1.6 billion users, of whom 21 million are in Spain. And it is ready to keep growing – not just in users but also in the number of services and products made available to them.
Facebook is one of banking’s greatest threats because of its “potential for incursion in the bank transfer business at the global level”
The payment-processing service has been operational in the US for a year, allowing users to add a debit card to their Facebook Messenger account – the world’s second top instant-messaging service after WhatsApp (which is also owned by Mark Zuckerberg’s company).
Facebook has yet to explain how it plans to roll out the service in Spain and the rest of the euro zone. Records at the Bank of Spain show that Facebook Internacional Limited was added to the registry on October 25, and is now authorized to develop seven activities in connection with electronic money transactions.
The move represents a new challenge for banking, which is trying to retain control of digital operations. In mid-2016, a study by the business school Instituto de Estudios Bursátil (IEB) warned that Facebook is one of banking’s greatest threats because of its “potential for incursion in the bank transfer business at the global level,” the news agency Europa Press reported.
“This would considerably reduce the fees charged by lenders for this type of transaction,” notes Rodrígo García de la Cruz, who wrote the report.
Other digital players considered a threat to traditional banks include Apple, Amazon, Google and Paypal.
English version by Susana Urra.