- Facebook created a new team dedicated to its payments and commerce initiatives, dubbed Facebook Financial.
- The new team could help Facebook quickly expand its offerings and capitalize on digital payments’ rising popularity.
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Facebook Financial should help Facebook unify its resources and strategies across its platforms, per Bloomberg. The team is being led by David Marcus, who will also remain the head of Novi, which is developing a digital wallet for Facebook’s cryptocurrency, Libra.
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Facebook Financial will likely be charged with helping Facebook’s recent payments and commerce efforts scale so it can capture more payments volume.
- The company debuted Facebook Pay in 2019, and Facebook Financial could help it successfully streamline payments across Facebook’s platforms. Facebook Pay is meant to allow users to save a credit card, debit card, or PayPal account that they can use to make payments on Facebook, Instagram, Messenger, and WhatsApp. The offering is still rolling out to these platforms in various countries, and Facebook Financial’s focus on payments may help Facebook Pay scale faster, creating a consistent payments experience throughout Facebook’s ecosystem that could entice users to make more payments in the near future.
- Facebook Financial will need to focus on WhatsApp’s payments efforts so it can overcome regulatory obstacles in India and Brazil. WhatsApp has developed payments capabilities in Brazil and India with the aim of leveraging its massive user bases — it claims 120 million users in Brazil and 400 million users in India — to quickly rack up payments volume via peer-to-peer (P2P) payments and merchant transactions. But regulators in both Brazil and India have prevented WhatsApp from rolling out these capabilities. Facebook Financial’s dedication to Facebook’s payments efforts could bring a new level of resources and focus to address these roadblocks.
- The new team could help Facebook bring its selling tools to more merchants. Facebook has started letting merchants create their own stores on Facebook and offer in-app checkout on Instagram, and it plans to add more capabilities, like selling via live video streams and incorporating loyalty programs. These tools position Facebook to tap into social commerce, which eMarketer estimates will reach $23.3 billion in the US in 2020 — and it could capture a greater share of the market if Facebook Financial recruits more merchants to sell on its platform and extends its tools to more sellers.
Facebook appears to be introducing Facebook Financial at the right time because digital payments and ecommerce are taking off during the coronavirus pandemic. Online sales are thriving since some consumers are limiting in-store transactions to lessen their chances of contracting the virus, and digital payment services like P2P payment platforms are finding success now that consumers are looking for new ways to make and receive payments.
By expanding Facebook’s payments and commerce initiatives now, Facebook Financial should help the company benefit from the rising number of opportunities in the digital payment space and potentially build a loyal user base that’ll use Facebook’s payment services after the pandemic subsides.
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