In Facebook’s quarterly earnings report this week, CEO Mark Zuckerberg emphasized that the company would work to address regulators’ concerns over Libra for “however long it takes.” But he also underlined the platform’s commitment to make progress in all its payment innovations.

“I know that Libra is the one that has gotten the most attention recently, but it's really just one of a set of things,” he said. But is there more to this subtle shift in focus? Is a private cryptocurrency owned by the world’s largest social media company simply a way to push through a less controversial payments platform? Tongues have been wagging. 

Many have questioned the social media giant’s reasons for pursuing a cryptocurrency. Its exponential growth has come from its ability to blur borders and expand its offering anywhere it pleases–except China. Building its own money, however, turns those fluid boundaries into hard walls–governments don’t like foreign money flowing unchecked around their economies, and so Facebook has drawn regulatory fire over its proposals from just about everyone. But there might be method to its madness.  

In psychology circles, academic studies have demonstrated that scare tactics are an effective way of generating a positive outcome. Presenting something extreme, or something fearful, to an audience make people more likely to accept a less extreme version afterwards. In this case, Facebook’s offering of a private economy powered by a bespoke algorithm and run by a Swiss trust is the extreme idea. The less extreme version? Facebook becomes a payment platform all of its own. 


 "Presenting a fear appeal more than doubles the probability of change relative to not presenting anything or presenting a low-fear appeal,” said Dolores Albarracin, professor of psychology at the University of Illinois in a press release announcing her 2015 study on the subject. 

Payments and other fees generated $262 million in revenue for Facebook in the second quarter, up 36% from last year. But advertising remains its biggest revenue source, bringing in $16.6 billion, up 28% from 2018’s second quarter.

“Payment is one of the things that makes me particularly excited,” said Zuckerberg, speaking on the call. “Payments may be most important in the long term.”

Zuckerberg is understandably pumped about payments. The Q2 call took place on the same day that the Federal Trade Commission levied a $5 billion penalty on Facebook for allegedly deceiving members about usage of their personal information–and the SEC fined the company a further $100 million over its handling of data. Being a payments provider offers fewer hurdles than being a giant, opaque data harvester.  


Facebook’s commitment to finding a fully-regulated payments solution came through loud and clear on the call. 

Zuckerberg added that, as well as Libra, “We’re very focused on fiat currencies as well. That’s certainly a big area for investment.”

Despite the publication of Facebook’s Libra white paper, details of how its cryptocurrency will work remain sketchy and the commitment of the projects’ 27 partners is in doubt. 

On Tuesday, while expressing the company’s continued support for the project, Visa CEO Alfred Kelly said that, thus far, it had only signed a non-binding letter of intent to join the Libra Association. 

So what are the other flavors of mobile payment solutions Facebook has in its mighty arsenal? 

In the call, Zuckerberg named Facebook-owned Instagram Shopping, WhatsApp Business and Facebook Marketplace as just three other examples of Facebook’s payment landscape. 

“In the future, we’ll enable people to use the same payment account, to send money to friends and businesses on WhatsApp, shop on Instagram, or make transactions on Facebook,” he said. “We’re doing a whole lot of projects.”

Facebook is making progress in its payment testing solutions on WhatsApp in India (a country set to introduce a ban on cryptocurrencies) said Zuckerberg, and it’s also close to launching in other countries.


The company’s chief operating officer Sheryl Sandberg (also on the call) revealed that Checkout with Instagram, a solution that uses PayPal technology to enable online payments, recently began testing “in a very small closed beta” with 23 brands.

It wouldn’t be a bad result for the company if regulators were to clamp down on Libra but approve a non-crypto solution that Facebook already has up its sleeve. 

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