A year ago, Facebook announced a major management shake-up, which, among other moves, saw Messenger chief, and former PayPal president, David Marcus switching from Messenger to a new, secretive Blockchain-based project. Several senior Facebook team members were also assigned to the team, whose remit, Facebook noted at the time, was to “explore how to best leverage Blockchain across Facebook”, whatever that could mean.
A year on and small details have started to leak out – The New York Timesrecently reported that Facebook’s Blockchain project will seek to launch a new cryptocurrency offering which would enable users of Facebook’s apps to easily exchange money between friends.
As per the NYT report:
“The company is working on a coin that users of WhatsApp, which Facebook owns, could send to friends and family instantly, said five people briefed on the effort who spoke on the condition of anonymity because of confidentiality agreements.”
But more specifically, the project would enable people to send money home from other countries.
That could, in fact, be the key detail – this week, Ted Livingston, the founder and CEO of another messaging platform, Kik, wrote a post on Medium in which he explained how Facebook’s key aim is likely to help people who are working in foreign countries to send money to family back home via remittances.
As explained by Livingston:
“Every year people working in foreign countries send hundreds of billions of dollars home to family and friends. Today this process is slow, expensive and complicated, with an average fee of $14 to send just $200. If Facebook could offer people a way to send money home for free it would be a game changer for tens of millions of people.”
The country which sees the most money sent home in this way is India, and WhatsApp is the most popular messaging app in that country.
And where does Facebook plan to start its initial experiments with payments?
As per Bloomberg last December:
“Facebook is working on making a cryptocurrency that will let users transfer money on its WhatsApp messaging app, focusing first on the remittances market in India”
According to Livingston, Facebook’s following the same strategy path that Tencent, the owners of WeChat, used in China to transform WeChat into that nation’s dominant payment platform. WeChat is now used by more than 900 million Chinese people daily, and facilitates over $10 trillion in payments each year.
Livingston says that WeChat’s playbook is to:
- Make it compelling for people to bring their money into the messenger
- Make it easy for them to move their money around
- Create more and more reasons for them to keep their money inside the messenger
Facebook, Livingston says, will look to do this by first focusing on remittances, then adding more and more options for spending money within its apps, which could include bill payment options, food ordering, topping up phone minutes, etc.
This would provide a whole new revenue stream for the company, a whole new digital eco-system, and a whole new opportunity for platform dominance. And Livingston would know, having investigated the many ways to generate revenue from messaging for his own app, which, it’s worth noting, launched its own cryptocurrency in 2017.
That approach, while not confirmed by Facebook, definitely seems to be gaining validity – and this week, Indian tech news publisher Entrackr has reported that Tencent has now reached partnership agreements with three Indian banks in order to enter the country’s payments market with WeChat Pay, which is set to be launched in India mid-year.
Sensing the coming Facebook wave, Tencent appears to be looking to get in ahead of it by facilitating payments through existing financial frameworks, while Facebook, through the Blockchain, would be looking to move around them. But the problem for Tencent is that WeChat is not widely used in India, despite the company’s various promotional pushes to boost interest.
If you were looking to Facebook’s next big move as it goes about its well-publicized shift to messaging, this is likely it.
Again, as per Livingston, ‘Facecoin’ could be the future:
“As India gains momentum, Facebook could look to expand. First into other countries where remittances are popular, perhaps the Philippines and Egypt, followed by Mexico and Vietnam. To get adoption in more developed countries Facebook could combine Whatsapp, Instagram, and Facebook Messenger together, allowing Facecoins to move across all three services. Facecoins could start to replace cash in each of those countries, becoming the primary currency for billions of people.”
Again, Facebook hasn’t outlined its wider plan, but the various elementsare all starting to line up. Facebook had initially hoped that its Messenger Bots would fuel the next shift, would become the next thing that would drive greater messaging adoption and make its tools the key facilitators of a wide range of daily functions. That didn’t happen, but this next move could be much, much bigger.
For digital marketing, this could be a major shift. Even if it does play out as predicted, it’ll take some time to make its way to western markets. But it may change everything about how you connect with your audience.
This is Facebook’s next big play, and it’ll be important to keep tabs on how it develops.