Facebook’s Payment Revolution

Catch up with this week’s Five on Friday!

Jamie O’Donoghue
Jun 21 · 6 min read

#FacebookCrypto

Facebook finally revealed key details of its highly-anticipated cryptocurrency platform this week.

What does this mean?

The platform, codenamed Libra, will allow users to make purchases on Facebook’s apps as well as third-party sites for almost non-existent fees. With more than two billion monthly active users, Facebook’s online community is so large that Libra, at least in principle, could become the world’s most widely-used currency. Apparently all-too-aware of its poor reputation for privacy violations, however, Facebook has launched a crypto subsidiary called Calibra, which will collect and use data independently of its core business. As a result, there should be no fear that a user’s spending history is being exploited by the social network for targeted advertising. In order to build further trust, Facebook has also established the Libra Association, a collective of 28 companies that include payment rivals such as Visa, Mastercard, and PayPal. Supposedly, this will allow other voices to veto any objectionable decisions made by the Facebook team. Libra is arguably the most ambitious project in Facebook’s 15-year history, but whether the crypto revolution it promises will actually take off, or indeed pay off, remains to be seen.
Bet You Didn’t Know
Every minute, more than 150,000 messages are sent through one of Facebook’s apps.

#NotAnIPO

Workplace messaging company Slack began life as a public company on the NYSE yesterday, opening at $38.50 per share.

What does this mean?

In an IPO-crowded market, Slack has chosen to go via a more original route with its “not-an-IPO” direct-listing. This means the company simply floated its existing stock onto the exchange without raising any money or hiring underwriters beforehand. The last major company to do this was Spotify about 14 months ago. In a direct listing, the company doesn’t choose a price or decide who gets to buy in the night before trading begins as with a traditional IPO. Rather, Slack publicized an NYSE-calculated reference price of $26 per share as a guide for investors. Fortunately for the company, its shares soared over 60% in the first few minutes of trading after opening at $38.50 a piece, eventually reaching a high of $42. According to the company’s S-1 filing, Slack had 10 million daily active users (DAUs) at the start of this year, with more than 88,000 paid business customers — including more than 65 companies in the Fortune 100.

Bet You Didn’t Know

Slack is actually an acronym, standing for “Searchable Log of All Conversation and Knowledge.”

#Apple

In the latest installment of the trade war saga, Apple has publicly warned the Trump administration that an extension of Chinese tariffs could “tilt the playing field in favor of its global competitors.”

What does this mean?

Spokespersons for the tech giant told US trade representative Robert Lighthizer that top Apple products, including the iPhone, the Mac, and AirPods, will be negatively impacted if the administration enacts its proposed fourth round of tariffs against China. Apple has been manufacturing its major products in China for years, and while recent events have led to rumors that it will be shifting production elsewhere, the world’s most populous country remains a crucial base of operations for the company. For his part, Trump has said that the additional $300 billion worth of tariffs will only be imposed if his forthcoming meeting with Chinese leader Xi Jinping does not produce a favorable result. It’s unclear whether Trump will heed the warning of the world’s largest taxpayer (Apple has paid $35 billion to various governments in the past three years). Indeed, as today’s events in Iran showed, the leader of the free world is nothing if not unpredictable.

Bet You Didn’t Know

Former Microsoft CEO Steve Ballmer made the mother of all poor predictions in 2007 when he declared that the iPhone had “no chance” of gaining a significant market share.

#Amazon

No stranger to the ire of politicians, Amazon found itself in a war-of-words this week with Democratic Representative Alexandria Ocasio-Cortez over allegations that the e-commerce giant pays workers “starvation wages.”

What does this mean?

Appearing on Sunday’s episode of ABC’s “This Week,” Ocasio-Cortez took aim at the company’s pay rates as well as the net worth of CEO Jeff Bezos. “His ability to be a billionaire is predicated on the fact that his workers are taking food stamps,” she alleged. Amazon responded soon after on a platform famous for the decency of its discourse — Twitter. A spokesperson called the Congresswoman “just wrong”, arguing that the company is “a leader on pay… at $15 min wage + full benefits from day one. We also lobby to raise federal min wage.” Amazon has had its disputes in the past with countless Washington heavy-hitters, including President Trump and Democrat presidential hopeful Bernie Sanders. It isn’t even the company’s first dispute with Ocasio-Cortez. Earlier in the year, the politician was one of the most vocal opponents of Amazon’s HQ2 project in New York City. It was one of Ocasio-Cortez’s most high-profile campaigns to date, and when the plan was aborted, she was celebrated (and castigated) for having “chased” the company out of the city.

Bet You Didn’t Know

Amazon’s famous logo shows a smile stretching from A to Z in the company name to signify that it will deliver “to everyone, anywhere.”

#AndFinally

Twitter canceled its precise geotag feature this week for an age-old and highly understandable reason: nobody was using it. The microblogging site had been supporting geotagging — which allowed users to browse tweets based on location — as early as 2009. The idea was that the service would help the Twitter community organize and keep up with local events such as concerts and fundraisers. However, as the platform’s other stand-out features such as trending topics, and especially the ‘hashtag’, came to prominence, geotagging never quite managed to find its feet. The change is not too dramatic, though. For the handful of Twitterers who will actually miss precise geotagging, the feature will still be available for photographs, at least for now.

What does this mean?

As Twitter begins, at last, to clean up its user interface, many fans of the site are wondering why the most requested feature of all — an ‘edit’ button — has yet to show itself.

Bet You Didn’t Know

In case you don’t believe in miracles, Twitter was almost given the shudder-inducing name of ‘Friendstalker.’

The Week In Numbers

20,000 people

petitioned Netflix this week to cancel the show ‘Good Omens’ for “blasphemy” (even though it’s an Amazon show)

11 million

is how many fake businesses are listed on Google Maps, according to a report filed this week.

$100 million

is how much Jeffrey Katzenberg’s planned streaming service Quibi has already managed to secure in ad sales.

The Takeaway

Easily the most consequential business news to come out this week was Facebook revealing details on what might genuinely be an emerging digital payments revolution. As more and more big businesses flirt with crypto, it might just have taken a tech giant like Facebook to bring the blockchain into the mainstream. Meanwhile, we saw the brave new world of Silicon Valley clashing for the umpteenth time with the old-fashioned demands of geopolitics and great-power rivalries. With so many alternative forms of currency, communication, and commerce in operation, it can sometimes feel like the Internet is not so much a new kind of technology as a different dimension altogether.


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Jamie O’Donoghue

Written by

Content Specialist at MyWallSt

The MyWallSt Blog

Investing is for everyone, we show you how. MyWallSt is a multi-award winning company that helps you to become a confident and successful investor.