What Facebook’s leaked audio reveals about its payments strategy

Time to get this right.
Time to get this right.
Image: REUTERS/Stephen Lam
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Facebook is exploring rolling out money transfers in India and Mexico, CEO Mark Zuckerberg said in an internal meeting leaked to the Verge, revealing more about the company’s plans for a financial service—that may or may not include its planned Libra cryptocurrency—than it has said publicly.

“We basically put out this big idea for enabling through our networks—through WhatsApp and Messenger—the ability for people to send money hopefully as easily as you can send a photo or other content across the world to different folks,” he said, according to the Verge’s transcript. “But we want to work with traditional currencies. So we have a test going in India. We’re working in Mexico and a bunch of other countries to have this rolled out broadly. The hope is to get that rolled out in a lot of places with existing currencies before the end of this year.”

Zuckerberg’s statement seems to refer to WhatsApp Pay, which it has tested in India—not Libra, its cryptocurrency project. However, his comments also hinted at Facebook’s Libra strategy.

Neither India nor Mexico has been warm to cryptocurrency. In March, Mexico’s central bank considered regulation banning cryptocurrency exchanges, and in July, India weighed a crypto ban, including possible jail time for crypto users. The Indian government, in particular, has historically been strongly anti-crypto. Perhaps that explains why Zuckerberg referred to a rollout with existing currencies, instead of with Libra.

Facebook would not verify the accuracy of The Verge’s transcript. Facebook spokesperson Josh Gunter said neither Facebook nor the Libra Association—the Swiss organization overseeing the cryptocurrency—have tested Libra in India or Mexico. Facebook did not say specifically whether it tested transfers of the Mexican peso or Indian rupee on its platforms.

In his comments, Zuckerberg also acknowledged that public interactions with policymakers over Libra have been fairly superficial. David Marcus, formerly head of Facebook’s Messenger, now leads Calibra, Facebook’s cryptocurrency wallet subsidiary. He testified before the US’s House Financial Services Committee and Senate Banking Committee in July, shortly before the leaked meetings took place.

Here’s what Mark Zuckerberg said about those hearings:

“Part of the process is going to be public, like the hearings that David did over the last couple of days. The public things, I think, tend to be a little more dramatic,” he said. “But a bigger part of it is private engagement with regulators around the world, and those, I think, often are more substantive and less dramatic. And those meetings aren’t being played for the camera, but that’s where a lot of the discussions and details get hashed out on things. So this is going to be a long road. We kind of expected this—that this is what big engagement looks like.

In all, Zuckerberg’s responses to his employees show that Libra is facing hurdles. Still, the CEO’s commentary demonstrates a willingness to engage with policymakers and possibly prioritize transfers of existing currencies on WhatsApp Pay/Messenger over the development of Libra.