The money transfer project, led by Sean Ryan, Facebook's vice-president of platform partnerships, signals a strategic shift for the company, which makes most of its money from advertising.
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It also comes as other internet groups – in particular, China's Tencent and Alibaba – race to turn their sites into mobile payment platforms.
Google has reiterated its commitment to expanding its mobile payments and wallet products, which have yet to be widely adopted by consumers. It is registered in the UK to issue electronic money, in a process similar to the authorization which Facebook is seeking in Ireland.
Obtaining an e-money authorization in Ireland would require Facebook to hold capital of €350,000 and segregate funds equivalent to the amount of money it has issued, according to legal experts.
Facebook is already authorized for some forms of money transfer in the United States, allowing it to process payments for developers who charge users for in-app purchases.
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In 2013, the company facilitated $2.1 billion worth of transactions, almost exclusively from games, according to documents filed with the Securities and Exchange Commission.
Facebook takes a fee of up to 30 percent for such payments, and these fees account for about 10 per cent of its revenues.
Vodafone has acquired an e-money licence for the phone company to operate financial services in Europe.
"It's great news that non-banks are challenging the traditional banking monopoly," said Simon Deane-Johns, a UK-based lawyer and European payments expert at law firm Keystone Law.