Facebook is set to launch a revolutionary new financial product out of Ireland once it obtains regulatory approval from the country’s central bank.

The new financial service will offer remittances and electronic money and is only weeks away from approval.

Financial experts believe the move will see Facebook challenge traditional banks in the sector.

A report in the Irish Times says the service will allow Facebook users to store money on the social network and use it to pay and exchange money with others.

Authorization from Ireland’s central bank to become an ‘e-money’ institution will allow Facebook to issue units of stored monetary value that represent a claim against the company.

The paper says this e-money will be valid throughout Europe via a process known as ‘passporting.’

Under the terms of their agreement with the Irish central bank Facebook will be required to hold capital of $500,000 and segregate funds equivalent to the amount of money it has issued.

The move will strengthen Facebook’s links with Ireland where 500 people are employed at its international headquarters.

The report adds that Facebook has also discussed potential partnerships with three London start-ups that offer international money transfer services online and via smartphones - TransferWise, Moni Technologies and Azimo.

However, a Facebook representative told the paper that the company did not comment on ‘rumor and speculation.’

A source close to the financial services deal told the paper that a move into migrant remittances is part of Facebook’s push to increase its presence in emerging markets.

The source said, “Facebook wants to become a utility in the developing world, and remittances are a gateway drug to financial inclusion.”

The money transfer project is led by Seán Ryan, Facebook’s vice-president of platform partnerships, and, according to the Irish Times, signals a strategic shift for the firm which makes most of its money from advertising.

Google has also reiterated its commitment to expanding its mobile payments and wallet products.

Facebook is already authorized for some forms of money transfer in the US, allowing it to process payments for developers who charge users for in-app purchases.