As it looks to make a significant step into eCommerce with its Facebook and Instagram Shops, which will eventually enable simplified, streamlined purchases from posts within each app, Facebook also needs to establish integrated payment options that meet both regulatory and evolving consumer requirements.
And while it’s developing several tools on this front, it’s also been faced with significant challenges in getting them off the ground – which is why, this week, Facebook has announced the establishment of a new ‘Facebook Financial’ group to oversee its various payment initiatives.
As explained by Facebook’s head of Novi David Marcus – which is the renamed Libra wallet, part of Facebook’s ongoing cryptocurrency project, the new team will include former Upwork CEO Stephane Kasriel, who will oversee the various elements.
And there indeed various elements in play – while Facebook continues to work on its crypto payments project, which could, eventually, enable simplified payments via a Facebook-connected digital wallet, which could run separate from traditional bank transfers (and thus, waive any related fees), the company is also working on a broader rollout of both Facebook Pay and WhatsApp Pay in order to facilitate direct payments in different regions.
A key to Facebook’s growth plans for on-platform purchases will be developing regions, where the company envisions its apps becoming central to all forms of online shopping and day-to-day transactions – similar to how WeChat and AliPay have become key elements in everyday life in the Chinese market.
But Facebook has faced several roadblocks as it works to implement such solutions.
Facebook announced the launch of WhatsApp Pay in Brazil back in June, but it was blocked by the nation’s Central Bank only days later due to concerns with the ‘competitive environment‘ within the company’s financial space.
Facebook has also tried several times to launch in-stream payment options in India, only to be halted by local authorities who are highly skeptical of foreign-based firms establishing a stronger presence in the region. Facebook will be looking for another way in via its $5.7b investment in Indian mobile provider Jio, announced back in April.
And this is before we even get to Facebook’s Libra cryptocurrency project, which was once seen as the next major step, but has since encountered several stumbling blocks as regulators examine the detail of how such a system would work.
If Facebook can, indeed, get Libra off the ground, it could have major benefits, in many regions, but with the project subject to a US Senate hearing, and ongoing investigation – while Facebook itself remains under scrutiny over antitrust concerns, relating to its massive market power – it seems like we’re some way of that happening.
The new Facebook Financial group will be responsible for overseeing all such aspects, and guiding them through to the next stage.
As noted, it still feels like we’re a distance from any major announcements on this front, but the potential here is massive, and it would only take a few rulings to go Facebook’s way to see a major shift in how people browse and buy online. One-click purchases via Instagram would be huge, and if Facebook, as noted, can become the base eCommerce platform in developing markets, it can set itself up for massive, ongoing success.
There’s a lot to manage, and a lot of regulatory detail to go through – it won’t be easy for Kasriel and crew. But it could be a major, transformative element for the platform, if it all goes to plan.