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Calibra, the subsidiary Facebook created to develop a wallet for its forthcoming cryptocurrency Libra, may be the social giant’s ticket to monetizing Libra and building out other financial services, per The Verge.
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Libra is meant to serve as a baseline for other financial offerings, according to Kevin Weil, Calibra’s VP of product. Weil noted that financial services firms like Visa and Mastercard can drive merchant acceptance of Libra with millions of businesses around the world — adding that Calibra would like to offer financial services built off of Libra, like credit, which would ultimately be a lucrative play: US credit card fee income, primarily from swipe fees, amounted to $100 billion in 2018, for example.
Further, Facebook’s ability to leverage its massive network throughout its platforms and partner with 28 other companies — with a goal to reach 100 by Libra’s launch — to push Libra will allow the product to scale to a level beyond what competing tech giants have offered.
When Libra launches, Calibra will likely be consumers’ first point of contact with the crypto while other wallets are developed — and it can arise as the predominant wallet as a result. For context, third-party developers will be able to create wallets for Libra.
- Being tied to Facebook’s massive network will allow hundreds of millions of people access to Calibra — equipping it with a wider reach than any existing cryptocurrency wallet. And beyond its integration with WhatsApp and Messenger, the stand-alone iOS and Android Calibra app will be accessible to people without Facebook accounts as well. Weil highlighted the similarities between what you might want out of a wallet and messaging app — people are likely to send money to friends and family just as they’re likely to chat with them over Messenger — which could serve as an advantage for the platform. Further, to make Calibra accessible to the masses, Facebook isn’t planning on charging high fees or using ads to make money. The firm doesn’t plan on charging fees for P2P payments, but might charge low fees for merchant payments to cover risk, Weil noted.
- Its integration into WhatsApp, specifically, could give Facebook direct access to the millions of unbanked consumers in developing markets. WhatsApp is extremely popular in developing markets where Facebook sees Libra taking off. India, WhatsApp’s biggest market by users, for example, could be receptive to Calibra. And while other popular services like PayPal and Venmo exist for P2P payments, they require users to link a card or bank account, which 1.7 billion people globally don’t have access to, further demonstrating Libra’s utility. Calibra will be widely accessible, including to people with lower-end smartphones.
- And Facebook is taking several measures to ensure the separation between transaction data and users’ Facebook accounts.For security, users will have to sign up for Calibra using a government-issued ID, and it will provide fraud protection and a commitment not to share financial details or transaction history with Facebook for advertising purposes. Facebook data and transactional data will, therefore, be kept separate. These efforts could ultimately enable Libra, Calibra, and any other services Facebook adds going forward to gain consumer trust despite the social giant’s history of privacy woes.
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See Also:
- A computer science student scraped 7 million Venmo transactions to warn other users about their privacy
- WorldRemit has debuted a cross-border B2B solution for SMBs to pay employees worldwide
- Stripe is rolling out Terminal across the US
Source: Business Insider – feedback@businessinsider.com (Rachel Green)