MOUNTAIN VIEW, Calif.–Approximately $100-billion in payments has been enabled by Facebook over the past year, and the company is describing that as “just the start.”
Facebook is increasingly seeking to be more than a platform for messages and instead a platform for people’s financial lives, according to David Marcus, who runs Facebook’s financial services.
Marcus has written in a new memo about America’s “broken” payments system about the central effort of Facebook’s push into payments, Novi, a digital wallet intended for users to move money around the world quickly and cheaply (free, in many cases), according to the New York Times.
The Times report noted the company had plans to pair it with a “stablecoin” cryptocurrency called Libra, but, as CUToday.info reported earlier, that was shelved amid regulatory scrutiny, and now the scaled-back project, known as Diem, is overseen by an outside nonprofit group seeking the necessary government approvals to launch.
According to Marcus, Facebook continues to face unfair resistance in the financial industry.
“I’ve heard multiple conversations about how this proposal would be so great if only Facebook wasn’t involved,” he stated. “I understand and accept the need for extra scrutiny due to our scale.”
‘No Specific Plan’
But, he also said Facebook as a “challenger in the payments industry” has no specific plan yet to monetize use of the Novi wallet, which won’t charge for person-to-person payments, even across borders, the posting states.
Marcus believes payments would be better with crypto, arguing that allowing users to pay with dollars, euros and other fiat currencies via the Novi wallet would bring a lot of value. “So why not just do that and call it a day?” he writes. “Well, we might,” he says, but before deciding on that, he doesn’t want to “waste our shot” at incorporating stablecoins into an “open, interoperable protocol” for online payments.
“To have the maximum impact, building a closed system using fiat only wasn’t going to cut it,” he wrote.
The Times report cited crypto advocates who say blockchain technology allows for products that eliminate middlemen, credit checks and fees and allow people excluded from traditional financial services to transact anytime, anywhere.
For his part, Marcus wrote that a well-designed stablecoin pegged to a fiat currency, backed one-to-one in cash reserves, would offer strong consumer protections. It would also be quicker to access funds than traditional bank accounts.
What’s Next?
So, what’s next?
“We will continue to persevere and demonstrate we can be a trusted player in this industry,” Marcus wrote, stating the Novi wallet has licenses or approvals in nearly every U.S. state and the Diem stablecoin project “has addressed every legitimate concern.”
Facebook’s digital wallet, wrote Marcus, is ready to come to market and “we deserve a fair shot.”