Facebook FB has big plans to expand in the world of financial services. It wants to become a world s best digital wallet and replace established players like PayPal PYPL in the process.
The social network's Novi division will be a next generation digital wallet built on cryptocurrency that will be nothing short of a new protocol to make money on the internet, according to David Marcus, head of Facebook Financial, who's taking the lead in launching Novi in coming months.
Facebook aims to create something with capabilities that people are compelled to try at least once, especially when they need to send money overseas. Doch Novi knows it has something pressing to care of before people embrace Facebook. Marcus's plan is to earn people's trust, said Waltz. I know that but it will take time, and I'm cognizant of that. For years, Facebook has struggled to earn people's trust, especially after the Cambridge Analytica scandal in 2018, when reports emerged that a firm hired by Trump campaign had harvested the data of millions unwitting Facebook users.
Marcus — a former PayPal president who later served as Facebook's vice-president of messaging products — spoke to Yahoo Finance Editor-in Chief Andy Serwer as part of a wide-ranging conversation with Andy Serwer for Yahoo Finance's weekly series Influencers.
Novi is being launched in conjunction with the launch of Diem, a preliminary cryptocurrency project by Facebook that became public initially in 2018. The project, originally called Libra, faced a number of setbacks and in 2019 Financial giants like MasterCard and Visa abandoned the project.
Rebranded Diem, the project now operates as an independent association but retains close ties to Facebook and has Marcus on its board of directors. Marcus hopes to leverage Facebook's digital currency advantage with Novi.
Currently, as Marcus said, digital wallets can't communicate with one another. Imagine a world where somebody with Yahoo Mail could't send an email to someone using Gmail, he postulated. That's true for money in wallets today, he said.
He said with Novi: "You'll have interoperability." The idea is that Novi — a standalone app that will also plug into Facebook products — will be able to convert your local currency into cryptocurrency, and vice versa. You can use your local currency to purchase Diem, Novi's FAQ said, and also convert Diem into your local currency when you want to withdraw. Facebook is even building out local cashout points around the world to customers with no bank account can convert their Diem coins into local currency.
'Your financial data is not going to be commingled with your social data In essence, Facebook is trying to leverage its built-in scale and social advantage advantages while avoiding some of the baggage the company has built up over the years over human privacy and targeted ads.
Marcus wants to be super clear on this, says he. No data that will be used in Novi can or will be used for ad targeting, or for any purposes around the ad model. Your social data is not going to be used with your financial information (SMS) Facebook had also stops and starts that could give some potential users pause. Diem was initially launched under the name Libra and instantly drew the attention of regulators and watchdogs. And after CEO Mark Zuckerberg endured a grilling in Washington over the crypto currency, the company pivoted the coin s mission, scope, and even its name. It was rebranded as Diem in December 2020.
The Novi site notes that it used to be called cava.
Marcus thinks Diem and Novi are planned to wait until primetime with a planned rollout beginning later this year and continuing into 2022. We want to be very deliberate in the way that we scale the product, he says.
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.
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