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Facebook Gets Its Own Financial Unit

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In This Article:

Facebook has formed a new financial group to focus on payments that will oversee Facebook Pay, Whatsapp Pay, and other Facebook payments commerce projects.

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Facebook Payments Unify

Facebook Inc. wants to delve deeper into commerce opportunities, so the new Facebook Inc. group has been unveiled to pursue payments and ultimately increase revenue.

In Charge

Facebook logo on the smartphone screen and the brochure with Libra logo | Facebook Gets Its Own Financial Unit | In Charge

Co-creator of its Libra cryptocurrency project, David Marcus is in charge of the group. Stephane Kasriel, the former Upwork Inc. Chief Executive Officer, has been hired by Facebook to the role of vice president.

Marcus’s job before Facebook was as president of PayPal Holdings Inc., so he’s a veteran within the field. He was hired by Facebook in 2014 and ran Messenger for four years before starting on the Libra project.

Unification

The unification of payments among the company’s various platforms, i.e., WhatsApp, Messenger, and Instagram, will merge under one roof. The idea behind the planning is to unify the framework operating its various networks.

As users make Facebook payments on Instagram, Messenger, and WhatsApp, the advertising will become more valuable, and customers will spend increased time within the overarching company’s apps.

CEO Mark Zuckerberg has said in a recent earnings call that he wants to grow in-app transactions stating:

“As payments grow across Messenger and WhatsApp, and as we’re able to roll that out in more places, I think that will only grow as a trend.”  

Over the last few years, Zuckerberg declared plans to merge all the company’s messaging services, and the tech giant has re-branded Instagram and WhatsApp, so people know Facebook owns them. This latest stage is a companywide effort to bring Facebook’s separate products and apps closer together.

The Project

It has been called F2 internally, which is short for Facebook Financial. 

The new team will run all payments projects, including the company’s own e-commerce universal payments system, Facebook Pay, which is intended to be built inside all of its apps. 

The Facebook payments pitch is simple: 

  1. Connect your chosen payment card, or PayPal, to your Facebook account.
  2. Connect the function to WhatsApp, Messenger, and Instagram.
  3. Send or receive money from any of the platforms from anywhere in the world.

Other projects that the team will deal with include Novi, formerly called Calibra, a digital wallet designed for Libra, the cryptocurrency/payment network outfit. Although the project didn’t entirely take off as hoped, it was scaled back, facing many hurdles and regulatory scrutiny. 

WhatsApp Pay continues to expand, getting payments running in countries like India and Brazil. The in-chat payment feature allows users to make financial transactions through WhatsApp to people in their contact list. It was launched in India in February 2018, initially as a trial to a million users under a partnership with ICICI Bank, who could send and receive money via WhatsApp Pay. Approval to roll out to 10 million more users was granted earlier this year.

Rollout

a woman holding the credit card and the phone in front of the laptop | Facebook Gets Its Own Financial Unit | Rollout

Although the payments system will take time to be approved by regulators and will need to be rolled out across various countries, Marcus will have prior financial services regulation experience during his time getting Libra off the ground. The role involved sorting cross border payments and negotiating with different bodies.

Marcus said that “it’s helpful to have specific expertise in financial services regulation to build things the right way from the get-go.”

“In the financial services world, it’s very different from traditional technology companies that are not regulated.” 

“We have a lot of commerce stuff going on across Facebook,” … “It felt like it was the right thing to do to rationalize the strategy at a company level around all things payments,” he said.

Final Words

F2 will be running all of Facebook’s financial projects. Unifying all of the company’s different payment systems under one roof makes sense as the financial payments sector grows as a trend. Keeping users inside Facebook payments apps, rather than Google Pay, Apple Pay, and PayPal, will support the advertising revenue.

How do you see the future of Facebook payments and payment systems in general? Do you think they are a safe platform? Let us know in the comments section below.

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