Skip to content
CCG Insights

Insight

  • Insight

Why Facebook Still Wants to Invade the Payments Space

Why Facebook Still Wants to Invade the Payments Space

Why Facebook Still Wants to Invade the Payments Space

The social media giant’s attempt to launch the Libra cryptocurrency ran into resistance early on. The struggle to woo banks into the fold continues. But the introduction of Facebook Pay underscores the company’s continuing payment ambitions. The head of Calibra, Libra’s home inside Facebook, continues to believe in the blockchain-based instrument’s future.

While Facebook has taken some PR lumps over its Libra cryptocurrency concept, it’s not as if the company was a payments newbie.

Facebook has a longstanding interest in payments, and has already made a considerable amount of money from its payments activities. Consider that the social network produced $269 million from “payments and other fees” in the third quarter of 2019, a respectable haul. However, Facebook’s payments revenue has remained relatively flat for the last several years. And payments income continues to be dwarfed by advertising revenue, which reached $17.6 billion in the same period.

Even as the company worked at Libra, it was busy on other fronts. The late 2019 announcement of the gradual rollout of Facebook Pay appears to be the company’s effort to collect all of its payments services under one umbrella. They have been part of Facebook Messenger, WhatsApp and Facebook itself, where payments often take the form of games payments. This seems like a natural progression, and also prepares Facebook Pay for quick deployment in future services, inside or outside the walls of Facebook.

Payments Development Continues to Be a Facebook Priority

The Facebook Pay announcement closely followed the high-profile departure from the Libra Association of major payments companies such as Mastercard, PayPal, Stripe and Visa. From its announcement in June 2019 the Libra endeavor was met with hostility on several fronts.

Most seriously, the Libra Association ran into difficulties with regulators and the central banks of several countries. For example, both the People’s Bank of China and the European Central Bank indicated they would respond to the “challenge” of Libra, by moving forward with their own stablecoins — digital currencies pegged to fiat currency. Patrick Harker, President of the Federal Reserve Bank of Philadelphia, added to this, calling a U.S. stablecoin “inevitable.”

This resistance comes at a time when Facebook has been mired in a negative news cycle relating to the current stormy political climate. Mark Zuckerberg and company seem to be having difficulty getting clear of this and related politics. This atmosphere is certainly responsible for some of the negative reactions to the initial Libra announcement in the summer of 2019.

Reactions to Facebook Pay were much more muted, probably because Libra’s scope is more ambitious than that of Facebook Pay, which rides traditional payment rails. It remains to be seen if the two become linked in the future.

Keep reading on The Financial Brand.


Subscribe to CCG Insights.

You Might Like These, Too

Mastercard's Chris Reid: Fighting Fraud Side by Side with Startups

Mastercard’s Chris Reid: Fighting Fraud Side by Side with Startups

BB&T Acquires SunTrust in All-Stock Deal – Merged Bank Will Be the Nation’s Sixth Largest

BB&T Acquires SunTrust in All-Stock Deal – Merged Bank Will Be the Nation’s Sixth Largest

Are We Done With Overdraft?

Are We Done With Overdraft?

The Challenger Bank Edge

The Challenger Bank Edge

Leaders in Bank Consulting

About CCG Catalyst
Latest Insights
CCG

PHOENIX • NEW YORK • LONDON • SINGAPORE

Phone: +1-480-744-2240  • Contact Us

© 2023 CCG CATALYST CONSULTING. Privacy Policy & Terms of Service.
Request a Call Back
Linkedin Twitter
Subscribe
to our Insights
Subscribe
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT
BANK
FINTECH
FUSION
  • About
  • Services
  • Insights
  • Fintech
  • Research
  • Team
  • Contact
  • Press
  • Careers
  • Events
  • RFI / RFP
  • Terms
  • Privacy
Linkedin Twitter Search
Subscribe for Insights

CCG INSIGHTS FOR BANKS, FINTECHS, AND CREDIT UNIONS

The Fed, Real-Time Payments, Alexa and Apple P2P, Part of Payment Revolution
  • Weekly digest of what's new
  • New research snapshots
  • Exclusive access to banking and fintech research
  • Industry news
  • Invitations to webinars and webcasts