Facebook’s new Financial product division will aim to consolidate in-app payments and transactions, as well as Facebook’s other financial products, under one umbrella.
Facebook Inc (NASDAQ: FB) is making all efforts to step-up its digital payments game by launching a new financial product group to promote “payments and commerce opportunities”. The head of blockchain division and the co-creator of Libra cryptocurrency – David Marcus – will lead the new project.
Internally dubbed as F2 – Facebook Financial – the new project team will run the company’s all payments projects, reports Bloomberg. This also includes Facebook’s universal payments feature – Facebook Pay – which will be available across the entire suite of applications.
The idea behind launching this product group is to consolidate all Facebook digital payments of and FinTech projects under one umbrella. This will also help to bring Facebook’s individual apps and products closer for e.g. WhatsApp, Messenger and Instagram.
Back in 2014, David Marcus joined the company as the head of Facebook’s messaging services. Later, he got promoted to lead Facebook’s blockchain division and its cryptocurrency project Libra. Although Facebook’s Libra ambitions face a regulatory wall, Marcus still continues to head Novi – the digital wallet for Libra.
Facebook makes some aggressive moves in the payments industry expected to explode in the next decade. The launch of a dedicated division also strengthens the fact of company’s strong commitment to the payments industry. Speaking about the launch of the new product group, Marcus said:
“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.”
Recently, Facebook also hired former Upwork CEO Stephane Kasriel as a vice president for its payments division.
Regulatory Challenges In the Payments Industry
Facebook’s struggle with regulators is not a new story. Ever since it announced its Libra cryptocurrency in June 2019, it has been facing several regulatory blockages time-and-again. Facebook has been actively flexing its muscles with WhatsApp payments in India. The company has invested heavily to make WhatsApp as a destination for commerce in these markets.
Facebook’s WhatsApp feature recently went live a few months back in Brazil. The company is still awaiting a regulatory nod in India. Marcus’ continuous negotiations with global regulators could help Facebook to work on the legal aspects of its payments initiatives.
“It’s helpful to have specific expertise in financial services regulation to build things the right way from the get-go,” he said. “In the financial services world, it’s very different than traditional technology companies that are not regulated.”
During Facebook’s recent earnings call, company CEO Mark Zuckerberg showed a keen desire on pushing in-app transactions. He said:
“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”.
It will be interesting to see how Facebook competes with other tech giants entering the payments industry.