Facebook is launching a special financial services division to integrate payment systems into the Facebook platform. The name of this section is ‘Facebook Financial’. It will be led by e-commerce expert David Marcus. He was president of PayPal before joining Facebook six years ago.
Marcus is one of the founders of Libra, Facebook’s virtual currency network, according to AFP. He is leading a team to create a service called Novi Digital Wallet for this currency. Libra will be able to offer various financial services from Novi Wallet when the currency is introduced. In addition to launching its own e-commerce service, it will also give small businesses the opportunity to advertise on Facebook.
According to AFP, all the payments on their platform from Facebook Financial and the management and planning of financial services will be done. Facebook currently has a variety of payment features. The services operated in isolation will be one under Facebook Financial.
Concerned about Facebook’s Libra, the Federal Reserve announced last week that it would launch its own instant payment system. The US Federal Reserve has promised to provide financial services as well as security.
Last year, when Facebook announced plans to launch their Libra cryptocurrency, financial officials around the world expressed concern. Facebook has to face criticism. There are also questions about the security and reliability of financial services on private networks.
Although Facebook has made strenuous efforts to bring digital currency to Libra, it has raised concerns for lawmakers in various countries. Libra’s associates have moved away from Facebook. Organizations such as Visa, MasterCard, Strip, Mercado, Pogo and eBay have moved away from the Libra Association.
News agency Reuters reports that Facebook added a partner like PayPal to launch the virtual currency or cryptocurrency Libra. However, Facebook began to receive negative feedback from various countries around Libra.
US President Donald Trump has been criticized for not being a fan of cryptocurrencies. If Facebook had to launch a cryptocurrency called Libra, they might need a banking charter.
According to Facebook, Libra will give everyone the benefit of an electronic wallet. The value of this currency will be captured in line with the values of all international currencies. Libra can be bought with conventional currency. Advertising will not be aimed at Libra as there will be no link to Facebook user information. There are plans to combine various Facebook products with Libra Payments. This will include issues such as bank deposits in virtual currency, short-term government security. It will not have inflation like other cryptocurrencies.
David Marcus, head of Calibra’s division at Facebook, the developer of Libra, said they plan to offer a variety of financial benefits in virtual currency in the future. There are also issues like lending. It is noteworthy that Facebook will not pay any interest to a Facebook user as opposed to the Libra that will be credited to his account.
Critics of Facebook’s financial initiatives say Facebook has already caused distrust for a variety of reasons. That is why it is difficult to take his emergence in the banking sector with confidence. The personal data of 240 crore active users is in the hands of Facebook at the moment. This data will not be used in money fraud, can Facebook guarantee that? So far, the US government has had to scrutinize Facebook’s efforts to introduce Libra. Facebook will have to come under the same policies that other banks and other financial sectors operate under. Facebook will promise that it will not invest in Libra by converting its customers’ deposits into conventional currencies.