If Facebook's pivot from town square to private living room wasnt laden with enough irony, heres a new twist: Big business, it appears, has been invited to join us by the fireplace.
On Thursday, The Wall Street Journal reported new potential details about Facebooks long-awaited cryptocurrency plans. The company is reportedly seeking dozens of business partners, including online merchants and financial firms, in an effort to extend the reach of its blockchain-based marketplace. Facebooks would-be partners are being asked to pitch into an investment fund, valued at $1 billion or more, that would serve as backing for Facebooks coin and mitigate the wild speculative swings that make cryptocurrencies like bitcoin hard to spend. The pitch, according to the Journal, involves offering merchants lower fees than credit cards.
Some were quick to note that this would reduce Facebooks ability to make money from payments in the short term. But that may not matter much—if, in the end, Facebooks crypto effort is really all about getting you to spend more time glued to Facebook.
Facebook appears to be already building out the plumbing to make its marketplace a reality. At its F8 developer conference last week, the word “blockchain” was notably absent. But even as Zuckerberg emphasized the companys plan to reorganize your Facebook experience around intimate relationships, his update included plenty of ways money would be involved. “I believe that it should be as easy to send money to someone as it is to send a photo,” he said, alluding to “simple and secure payments” as a core feature of his privacy-forward vision. That apparently extends beyond the peer-to-peer payments available on Venmo and Facebooks own Messenger app. In a series of keynotes, Facebook execs touted a litany of commerce-focused improvements: better checkout for Instagrams digital mall, donation stickers, and a new tool for small business owners to list items on WhatsApp.
Indeed, WhatsApp appears to sit at the center of Facebooks commerce efforts—at least to start. At F8, Facebook said WhatsApp Pay, currently on limited trial in India, would expand to additional, unnamed countries later this year. The platform isnt blockchain-based (for now) and is designed for peer-to-peer payments. But with 80 percent of small businesses in India using WhatsApp to market their goods, some form of payments processing is a natural evolution. In December, Bloomberg reported that the first tests of the crypto coin may occur in India, initially as a way for workers to send money home from overseas.
An added twist from the Journals report is the possibility that the coin will be integrated into Facebooks lucrative ads ecosystem. The scheme, reportedly still under debate within Facebook, would potentially work on both sides of the ads equation: Merchants could use the coins to pay for ads, and users would be rewarded in coins for viewing or interacting with them. That reflects a growing perception—seen recently in efforts like the Brave browser, which compensates users through a token for clicking on ads—that people should get paid for their attention, not simply help internet giants make money. For Facebook, it also presents a vision of how its ads and eyeballs-driven business could continue in the companys supposedly privacy-first era. The idea is to keep Facebooks coins—and therefore users—tightly enmeshed in the platform.
“I dont believe theyre doing anything that isnt in the service of increasing interactions on their platforms,” says Joshua Gans, a professor at the University of Toronto. Sending money to businesses presents a challenge, he notes. Compared with friends and family, businesses are more likely to dump their Facebook coins at the end of the month in favor of real money. Gans is skeptical that Facebook would pay users for viewing ads—an immensely tricky system to create—unless it involved someRead More – Source
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Ars Technica
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