Social media giant Facebook has had little to no success with convincing authorities and policymakers both at home and abroad to allow the Libra stablecoin to get approval for launch. In spite of that, the company is now working towards the rollout of another related product.
Recently, the company announced the launch of Facebook Pay, a payment processor that will facilitate payments across the suite of apps owned by the Silicon Valley giant, Instagram, Facebook, WhatsApp, and Facebook Messenger.
Not to Be Confused with the Stablecoin
In the announcement, the company reiterated that it had discovered an ability to help businesses grow, while also allowing people to make purchases via the Internet.
“People already use payments across our apps to shop, donate to causes, and send money to each other. Facebook Pay will make these transactions easier while continuing to ensure your payment information is secure and protected,” Deborah Liu, the Vice President of Marketplace & Commerce at Facebook, said in the press release.
Facebook Pay is a new payment system for WhatsApp, Instagram, & Facebook
You’ll be able to use Facebook Pay to send money to friends, shop for goods or even donate to fundraisers.The service will be separate from Facebook’s new Calibra wallet/Libra networkhttps://t.co/P1v3JFm165 pic.twitter.com/lfKbdstSZq
— Monica Jasuja (@jasuja) November 14, 2019
The announcement states clearly that the Facebook Pay platform has been “built on existing financial infrastructure and partnerships.” Hoping to avoid further regulatory scrutiny, the firm added that the service would not be a part of the Libra network, the Calibra wallet, or any other service that will be affiliated with the stablecoin pending the time required for the asset to get approval by the appropriate quarters.
Facebook Pay will roll out this week on Facebook and the Messenger platforms, and the company claimed that it would be primarily used for “fundraisers, in-game purchases, event tickets, person-to-person payments on Messenger and purchases from select Pages and businesses on Facebook Marketplace.”
No Payment Processors, No Problem
Although Facebook has done its best to distance this new product from Libra, it wouldn’t be too surprising to see it become an integral part of the stablecoins operation if regulators finally clear it. As things stand, the Libra Association (the Swiss body that governs the stablecoin) has lost every member that provides payment processing; Stripe, VISA, MasterCard, PayPal, and Mercado Paga all jumped ship at different times in October. This was due to the fear that the backlash coming to Libra could spill over to them via their association with the asset.
Twitter’s CEO, Jack Dorsey, also distanced himself Libra. Given that Dorsey also heads Square, one of the biggest payment processors in the world, it’s a bit safe to say that the latter won’t be joining the Libra Association as well
Devoid of any help from payment processors, Facebook could turn Facebook Pay into its de facto processor for Libra, further increasing the percentage of the stablecoin’s operation that will be completed in-house.
Of course, all of this will hinge on Libra getting greenlit by regulators in the first place.