What it might mean for your business
Back in June Facebook finally revealed the details of Libra
, it’s long-in-the-works cryptocurrency. The elevator pitch goes like this: Users around the world will be able to buy into Libra either online or through in-person exchange points, then spend it using Facebook’s Calibra
wallet (which will be integrated with Messenger, WhatsApp as well as its own stand-alone-app) as well as other third-party wallet apps. There won’t be any service fees and an individual’s financial data will stay separate from their Facebook profile.
Facebook plans to launch Libra in the second half of 2020—which, in dev time, is not terribly far away. And it does offer small- and mid-size businesses some distinct advantages. Here are a few advantages Libra might offer your business.
It opens up a global market.
Unlike Bitcoin, Libra isn’t aiming to replace currency—it simply wants to become the preferred digital payment method globally. As Mark Zuckerberg wrote in his Facebook post
, Libra will make instant money transfers a lot easier for the billion people worldwide who don't have a bank account but do have a mobile phone. (Lacking a back account is a problem right here in the United States, too—in fact, 25 percent of US households
are either unbanked or underbanked.) Mobile payments are par for the course in China
, where people rarely carry cash anymore. But with Facebook’s infrastructure behind it, Libra will be the first mobile money currency to truly have a global impact. If your company had considered any global sales outreach but nixed it because the financial logistics were too complicated, Libra might help you connect with customers who are currently out of reach.
It smooths out the checkout process.
Libra’s promise of universal integration with anyone who uses Facebook’s Messenger and WhatsApp messaging services has the potential to greatly reduce the friction of the checkout process for merchants who are willing to play ball. If your company’s site includes an online checkout process, your UX team has probably spent many sprints testing and finessing it to reduce the number of abandoned shopping carts. Libra would offer a faster route for customers to complete their purchases—and unlike PayPal or Amazon integration, Libra doesn’t charge a transaction fee (yet).
It (hopefully) provides stability of value.
Facebook won’t control Libra alone—instead, they’ll be one vote in the Libra Association
, a not-for-profit composed of global industry financial players that’ll manage the Libra Reserve
(that’s the money folks are paying into Libra) out of financially-neutral Switzerland and ensure its stability. Libra will be a basket of four currencies, which Facebook says should preserve the value of the digital coin (or at least more than other rockier cryptocurrencies such as Bitcoin). If you expect that a solid chunk of your revenue might come via Libra someday, or if your business is based around digital coins (such as the small independent retailers in the marijuana industry
), a stable price is no small thing.
Tech takeaways and next steps:
- Explore the Libra Developer Site for a better understanding of Libra protocol and blockchain. It includes a primer on Move, Libra’s new programming language.
- Monitor any security and privacy issues that may arise as developers begin to experiment with Libra’s code.
- Outline possible ways to integrate Calibra or another Libra digital wallet into your online checkout process with your UX team.
- Talk to your financial team about the risk that a so-called stable coin may, at some point, become destabilized and cost company a sizeable amount of money.