Facebook is preparing a money transfer service in Europe that would allow it to compete with the likes of Western Union, while giving users the option of storing money with the social network or buying items online.

The US tech firm is seeking regulatory approval in its European base in Ireland for "e-money" status, which would see it issue digital credits that can be converted into cash by recipients.

The firm already has permission for some forms of money transfer in the US, which allow payments within apps, including the Candy Crush Saga and Farmville games, from which Facebook takes a 30% cut.

The company facilitated $2.1bn (1.3bn) in transactions across Facebook in 2013, primarily to games publishers. Approval in Ireland would allow Facebook to operate an e-money service throughout Europe using "passporting", which allows digital payments to be used across EU member states without having to gain regulatory approval from each one.

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