Will Facebook’s new payments system transform businesses?
EVERYONE has access to Facebook and its portfolio of products in one form or another.
According to BBC News, the social media giant is planning on setting up a digital payments system and possibly using its own crypto-currency to make it seamless and futureproof.
The media outlet points out that Facebook CEO Mark Zuckerberg has been meeting with Bank of England Governor Mark Carney about its new service and has sought advice from the US Treasury about it as well.
BBC also claims that Facebook is also in talks with Western Union and other global money transfer firms to augment their services upon launch.
Internally, the crypto-currency is referred to as GlobalCoin and Libra interchangeably and is expected to make a debut in the first quarter of 2020 — although an official announcement should come in later this year.
How Facebook’s own payment system will benefit businesses
Living in a digital world where e-commerce is constantly growing and real-world transactions become digital-first, it doesn’t take a lot of imagination to see how Facebook’s own payment system will help businesses while also protecting customers.
WhatsApp, with more than 1.5 billion monthly active users in nearly 110 countries, the messaging app is usually the first choice of people when it comes to communicating — in the Asia Pacific and the rest of the world.
Enabling payments on WhatsApp, individual to individual and individual to business, will open up new avenues for the company while also giving additional mileage to financial inclusion programs championed by many governments across Asia.
Next, Instagram’s new Checkout feature, open to some big brands right now, allows customers to buy right from Instagram — without leaving the platform.
In the future, this feature could be augmented by the company’s own payment services, providing customers with an added layer of protection as Checkout becomes available to smaller, lesser known brands that might not all be keen on doing right by the customer.
Facebook needs the right infrastructure to get started
The world of financial services is complicated, especially when you bring cross-border payments into the picture.
Using crypto-currencies might make operating such a network easy but Facebook will still need to get approvals from all sorts of government organizations and regulatory bodies before its payments system can be launched.
Further, the company will need to ensure that services are set up in a way that there is maximum uptime irrespective of demand — which the company has already demonstrated competence at. However, with user’s money involved, the stakes will be higher.
Finally, when users begin engaging with Facebook’s payments system, they’ll need to really get tough on data privacy and security.
The company has promised to make this a primary focus in coming months and there is evidence that CEO Zuckerberg is making good on that promise but financial services is a whole new ballgame and Facebook must be well prepared for that.