Facing The “Reality”: Facebook’s Meta Move

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The recent rebranding of Facebook to Meta—to emphasize the platform’s metaverse vision—has been garnering attention from all sectors alike. However, the platform is no stranger to scrutiny. Ever since its genesis in 2004 by 19 year old Harvard sophomore Mark Zuckerberg, controversies, allegations and lawsuits have been the constant companions for Meta. But that hasn’t deterred the tech behemoth from being one of the most valuable companies in the world by market value. Diversification has always been a pivotal aspect in the tech giant’s innovation strategy, and it has held a long standing ambition to add payment services to its portfolio. One of Meta’s earliest attempts to foray into the finance industry can be traced back to its partnership with American Express in 2016, where it provided the bank’s card holders with an AmEx bot in the Messenger app. In this post, we explore some of the key events that shaped Meta’s journey in its quest to disrupt the payments industry.

Paying Heed To Payments

Meta’s courtship with payments can be dated back to 2016 – when it unveiled a feature where Messenger bots can accept payments natively without redirecting users to external sites. The launch of the marketplace feature in the Facebook app and Whatsapp Business app, to facilitate small businesses to connect with their customers, further accelerated its diversification aspirations. The following year, Whatsapp submitted a new update through the Google Play Beta programme – which would make payments available in app version 2.17.295. Meta soon backed this move up when Whatsapp rolled out a beta version of person-to-person payments feature in India. The launch of Meta Pay—with an aim to provide users with a secure, convenient, and consistent payment experience across all of Meta’s platforms—was a confirmation of the goliath’s FinTech ambitions. Within a couple of years, Meta further upgraded this service, allowing US businesses to enable Meta Pay directly on their websites, providing customers with a seamless checkout option without the need to re-enter the payment information.

Banking On The Banks

In a bid to transform Messenger into a hub for e-commerce and financial services, Meta in 2018 held talks with some of the biggest banks – including JPMorgan Chase, CITI, Wells Fargo and US Bancorp. According to the terms of the partnership, Meta would leverage the users’ financial information like credit card transactions, checking out balances, etc., to further upgrade Messenger’s features. However, JPMorgan Chase soon pulled out of the talks owing to the bank’s stringent privacy policies. Apart from its partnership with American Express, Meta had earlier partnered with PayPal to facilitate the users of the payment platform to carry out transactions via Messenger, and collaborated with Mastercard to let cardholders place online orders with select merchants through Messenger using Masterpass digital wallet.

Calibrating Crypto’s Caliber

Meta’s diversification attempts were not limited to the fiat payments only. In 2019, the social media platform announced itself to the blockchain world when it acquired Chainspace, a startup specializing in smart contracts. In a bid to hop onto the crypto bandwagon, it led a consortium to create an open source digital currency called Libra, and subsequently launched Calibra – a new subsidiary assigned to create a digital wallet with the same name to facilitate storage and exchange of the currency. The following few years remained witness to a host of key events for Meta’s controversial digital currency project. In early 2020, Libra filed an application with FINMA, the Swiss Financial Market Supervisory Authority, for a payment system license. The social media behemoth renamed its digital wallet to Novi from Calibra, and rebranded its digital currency to Diem. In 2021, in a bid to relocate to the US, Meta withdrew its application with the Swiss Regulatory Authority; and instead partnered with crypto friendly Silvergate Capital Corporation, with the bank becoming the exclusive issuer of the Diem USD stablecoin.

Innovation and Investments Go International

Meanwhile, Meta was equally focused with its innovation in the fiat world as well. Its expansion aspirations were driven by the launch of the “Shops” feature in the Facebook app for the US users in 2020, and in the UK and Canada the following year. Its diversification efforts spilled into the international segment with Meta’s attempts to gain a foothold in the Indonesian, Indian and Brazilian markets. In Indonesia, the platform invested in startup Gojek, in a bid to assist the super app’s mission to boost Southeast Asia’s digital economy; with a focus on supporting payments and financial services in the region. In India, Meta rolled out its Whatsapp payment feature after receiving approval from the country’s regulators – only two years after launching the beta version of the service. To further strengthen its position as a payment service provider in the sub-continent, Meta teamed up with Indian technology startup Indifi to launch “small business loans initiative” so as to facilitate the small and medium businesses that advertise on its platform to get access to instant credit through independent lending partners. According to the terms of the partnership, Indifi will decide the eligibility criteria of the borrowers and bear the risk of loan defaults.

Whatsapp’s Brazil Break

The gateway wasn’t so seamless for Whatsapp payments in Brazil. Within a week of its launch in the country in June 2020, Brazil’s central bank suspended the app’s mobile payments service in order to review fair competition and data privacy concerns. Though initially a big setback to Meta, the central bank soon overturned its decision, allowing the social media platform to test its Whatsapp payment feature in the country. The following year, Whatsapp Pay formally re-launched in Brazil with nine partner banks. To accelerate its FinTech aspirations, Meta launched a new product group called Meta Financial; which was later renamed to Novi as a part of the firm’s Meta rebrand. The newly established FinTech unit is tasked with overseeing the payment projects of the company across all the platforms.

Controversy – A Constant Companion

Towards the end of 2021, Meta in a partnership with Coinbase rolled out a small pilot of its much awaited digital wallet Novi in the US and Guatemala – where users could seamlessly carry out transactions using the Paxos stablecoin, with the cryptocurrency exchange serving as a custody partner for the pilot. The social media platform also announced the testing of a new split payments feature in its Messenger app that will allow users to share their bills and expenses among the members in the group chat. The same does not seem to be the case for the initial days of 2022, which so far, haven’t been kind to Meta. On 31st Jan, the Diem Association announced the shutdown of the firm’s Diem project, with the sale of its intellectual property and other assets related to the running of the Diem Payment Network to Silvergate Capital Corporation. Be it the social media goliath’s lunge into the metaverse, its controversial projects and policies, or the lawsuits against the company and its CEO Mark Zuckerberg, Meta has always been a subject of scrutiny by the policy makers and competitors alike. In 2022, Meta for the first time since its inception announced a decline in the number of users, resulting in the plummeting of company shares in the stock market. In spite of all the controversies, Meta has continued to grow through the years, owing to its strategic innovation and investment policies. Its user-first mindset has resulted in an exponential growth of the company over the years, and its long term vision amalgamated with efficient execution of ideas have ensured the success of the platform in an already crowded social media space – where several other pioneers give out so spectacularly.

Will Meta recover from this sudden and massive downturn and continue to move ahead on its FinTech, Crypto and Metaverse agenda? Or will it bottle-down its diversification aspirations and fix the leak in its core business? Since time answers all, guess we’ll just have to wait and watch!


Founder & CEO | sanjeev@whitesight.net

Sanjeev is a fintech aficionado who loves to explore the depths of the industry as much as he loves to explore the depths of the ocean in his scuba gear. He is the founder and CEO at WhiteSight, bringing a wealth of research and advisory experience to the fintech world.

Senior Research Associate

Risav is a senior research associate at WhiteSight, where he spends his days navigating the complex fintech landscape and poring over market trends. When he's not decoding the world of fintech, you'll find this sports fanatic decoding the perfect curveball on the football field.

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