Libra is part of Facebook’s identity play
What follows is a series of short notes exploring certain notions around open finance and open data in greater detail, backed by fruitful discussions at FDATA Summit in Edinburgh.
Talking about merging payment capability, the user profile based on transactional interest and the identity generated or validated by it, the credit capability generated by it, one of panels discussed the ambition of big groups to merge identity and payment: one panelist quipped there is not necessarily a wrong thing since “the Chinese” are already doing this, so there is little logic in stopping others to pursue this to counter them. Precisely the same logic the CEO of Facebook used in his deposition defending Facebook’s Libra project.
Weaponisation of tools serving users is a dangerous foray with little recourse: one has to understand that Chinese were pushed to generate identity to enable payments as a recourse to funding purchases in real-time, where there were no alternatives with regards to networks to push payments, fund transactions or even have decent profiles to underwrite credit decisions.
Alibaba and Tencent have much to lose in terms of relationships with hundreds of thousands of small merchants who fund the companies drive to onboard users — and the gyration of P2P economics is what forms the use-case of how people transact through these platforms.
The problem with the Facebook model is what it is and what it does now: dealing in CPA and general ad (even if targeted) business creates different motivation vis-a-vis transactional platform and using data for ads formed the current problem with Facebook — about how it allowed for misuse of data to begin with.
Another point extended at the conference was about how emerging markets put on the banner of Facebook are actually progressing without the pixie dust elements of the company’s project. India for example are doing just fine with payment bank licencing regime and the surge of e-commerce that would generate identities conforming with international AML KYC requirements.
Why Facebook is building it lies at the heart of the company real ambition: to serve users backed by real identity, so that it could prime its advertising algorithms and better serve the businesses.
dgwbirch is right, isn’t he always? )