Need to Know
- Big news out of Facebook as the social networking giants announce the launch of a new internal division: Facebook Financial.
- The new group will oversee Facebook Pay and Facebook’s other financial initiatives, Libra, and Novi.
- Facebook Pay may be the next competitor to top apps like Venmo and Cash App.
- While Facebook Pay is only available in the U.S. and U.K. currently, the company plans to expand to more countries eventually.
Facebook has announced the social networking giant’s next big iteration with the launch of a new internal department, Facebook Financial.
Led by David Marcus, the group will be joined by Stephane Kasriel (formerly PayPal) to oversee Facebook Pay, the recently-launched payments service that allows users to send money over the brand’s family of apps.
Dubbed F2 internally, the new team within the company will be in charge of all of Facebook’s payments projects, such as Facebook Pay, Libra (Facebook’s own cryptocurrency network), and Novi (the digital wallet that houses Libra). This group will also take care of Pay on Whatsapp, another Facebook-owned payments initiative that recently launched in Brazil.
“We have a lot of commerce stuff going on across Facebook,” said Marcus. “It felt like it was the right thing to do to rationalize the strategy at a company level around all things payments.”
Given that Facebook has become a massive engine for advertising, the idea around its payments functionality is that the more users shop and spend within Instagram, Messenger, and WhatsApp, then Facebook’s advertising opportunities will become increasingly valuable.
Said Facebook CEO Mark Zuckerberg in an earnings call, “as payments grow across Messenger and WhatsApp, and as we’re able to roll that out in more places, I think that that will only grow as a trend.”
Digital money-sending platforms have exploded in popularity in recent years, with Venmo leading the charge after first launching in 2009.
CashApp, one of Venmo’s top competitors, saw over 30 million transactions in June of this year alone—growing 167% in revenue since 2019.
PayPal, which owns Venmo and also runs its own money-sending service, saw a 25% increase year-over-year, and amid the onset of the global pandemic, reported its strongest quarterly earnings ever.
While Facebook Pay is currently only live in the U.S. and U.K., a Facebook spokesperson said in June, “We’re continuing to roll out Facebook Pay on Facebook to more countries outside the U.S. for existing payment experiences …. As we’ve said previously, our goal is to bring Facebook Pay to more people and places over time.”