The Significance Of Facebook Seeking To Become The Global Standard For Digital Payments Online
Facebook Seeking To Become The Global Standard For Online Payment
- Facebook’s blockchain team constitutes mini-PayPal
- David Marcus, former PayPal president to lead this division
Though Facebook’s blockchain project is still very much shrouded in mystery, a few details that have come out in the open suggests the social media giant is creating its very own PayPal that once presented itself as, “We seek to become the global standard for online payments.”
Its blockchain division is reportedly staffing up that now counts about 50 employees. What’s interesting is the fact that about one in five of these employees used to work at the same company, PayPal.
Back in December, there have been reports of Facebook recruiting 40 ex-PayPal members. And now this team, according to Bloomberg is driven by former PayPal president David Marcus.
Marcus left PayPal in 2014 to join Facebook as the head of its Messenger Product that now has more than 1 billion users. Last May, he left Messenger and announced that he was “setting up a small group to explore how to best leverage blockchain across Facebook, starting from scratch.”
Targeting The Ripe Remittance Market
This latest addition marks the signal of the company's ambition to integrate payments into its platform. As we reported earlier, the privacy-focused future of Facebook also involves cryptocurrency, a so-called stablecoin, that could be announced as soon as next quarter.
This stablecoin is pegged to the US dollar or a number of currencies to control the volatility present in the crypto market. There have also been reports of India being the first country to test the new currency. Eventually, it could allow the users to be used for remittances via WhatsApp.
Facebook Inc. is already testing regular payments in the country through its WhatsApp Pay product.
Facebook’s blockchain team might be growing but is still in early days with a lot to be known still.
“There is still a lack of clarity on what Facebook is going to do, but it looks like the long-term vision is creating a sort of marketplace model within Facebook,” said Harshita Rawat, a payments analyst at Sanford C. Bernstein & Co.
Given the fact that international money transfers are rife with inefficiencies, this is one of the sectors that is well-suited for cryptocurrencies as we have already seen with Ripple, Stellar, and JP Morgan.
And by “having people that have deep industry knowledge around payments,” Facebook is keeping its options open for its money transfer ambitious said, Rawat. Bloomberg also reported that Facebook insiders caution that the company is likely still far from releasing its product.