Platforms Integrating Payments

Good Morning Everyone,

It was announced on Friday Whatsapp are running a pilot program in the US and Guatemala to enable payments via Novi Financial, which as it turns out is actually owned by Facebook.

In a December 8th announcement Novi said:

“Starting today, a limited number of people in the US will be able to use Novi to send and receive money right within their WhatsApp chat.”

A couple of things stand out to me here.

First, this is the beginning of facebooks attempt to move to capture market share of global payments. Despite apparently zero fees, as you have hopefully already learned, if there is no cost - you are the product. They received a lot of push back from their Libra announcement a while back, but this has gone along much more quietly, and i would expect is only the beginning and they will aggressively look to expand and develop a lot in this area.

Second, this will introduce a lot of people to a new way to pay and transmit money.

Third, this is a direct attack on traditional banking institutions, and with an estimated 2 billion person user base Whatsapp have a serious edge.

4. Convenience wins. The convenience of paying direct in a messaging app without needing to exit the messaging app and open a banking app removes a lot of friction. Not to mention potentially removing the need for a banking app over time. We are lazy animals, and drive-thrus work for a reason. This fact is not trivial.

5. Chinese company Tencent saw huge success and adoption with this model via Wechat, and it is used as a government surveillance tool - will this be different? I am extremely skeptical.

Lots to think about here..

Ultimately while this transition is inevitable, it further highlights the critical need for a decentralized, open, public, borderless, neutral and censorship resistant form of money. Whether products like Whatsapp look to incorporate bitcoin over time or not is not certain, but I tend to think it is likely. Ultimately in my opinion, it does not matter. If they did, would I want to use them as a 3rd party to my transactions? No. Absolutely not.

Irrespective of the fact while it will offer plenty of convenience and it likely has its place as a layer of the traditional existing centralized system, it is in no way an alternative, or any kind of threat or competition to the king. Bitcoin.

As we have discussed - money is far too powerful a technology for a centralized entity, especially one like facebook, to own that data, to be in the middle of our transactions, and have any kind of surveillance capability over that information or ability to censor our transactions for any reason.

It’s important to understand the game that is being played here and act accordingly. Educate yourself and accumulate Bitcoin - that’s my plan.

Hope you have a great day, and I will chat to you tomorrow.

AK

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