Yea, the narrative in mainstream circles keep saying this is another data grab. It's understandable given Facebook's history, but it's ignoring the fact that they don't need more data to make this venture worthwhile. It's a massive opportunity all on its own, on the face of it.
Anybody who uses VISA or PayPal but then wouldn't use Libra because of "privacy concerns" probably doesn't realize how invasive these other companies are.
Libra will not require a Facebook account and will supposedly not be tied to a Facebook account, so the danger should be about the same.
If this product brings us from a world of venmo, paypal, facebook payments, wechat etc to one where I can use any of their clients to send money to any of the other clients, I consider it a huge win. It's so silly that my friends and I have to agree on the same money app to send money to each other. Imagine if I had to convince every person to use firefox before I could send them a url, or if they needed hotmail and gmail to receive messages.
Frankly, I find the entire fintech/payment processor/credit environment to be at times little more than a parasite that I'd like to see go away.
That won't happen though. Capital needs to flow as freely as possible; and the current players at least make that work. Libra, however, has no substantive purpose in the long run other than to finally tap into the rent-seeking upper layers of the financial system. It seems to be the tech industry's fallback when they can't think of anything more innovative to do. Start up a financial services division, and tap into those delicious fees from the "underbanked".
Make no mistake; the data grab possibilities are real barring explicit intervention by regulators. Any advertisement company based on data collection for ad targeting has far too much potential value to reap out of actually tapping into the transaction details of user's. Having the "world's biggest social network graph" at your disposal on top of a distributed ledger from which can be derived a parallel graph of financial activity represents a gold mine in terms of panoptic levels of informational awareness.
People don't seem to quite get it yet that a big enough pile of seemingly unidentifiable data points can be combined to create something as good as a fingerprint or DNA strand. In government work, this is explicitly highlighted anddrilled into every employee, every year (at least at the Federal level).
Caveat emptor. Embrace your localized economies; beware of those seeking to add you to their "customer base" for the sake of 'your convenience'. They wouldn't be going out of their way to get you onboard if they didn't have anything to gain in the long run.
Looks interesting on a light skim. However, one key point that is always missing, how will people buy/cash-out this libra currency? Most developing countries have transactions going on in cash(unless it is happening in few hundred thousands). You'd be lucky if you see a card-payment machine anywhere except on exotic shops like car-dealership/real-estate/big brand electronics(apple). ATMs are for rich/wealthy class only. There are no debit cards, banks don't give out credit cards to anyone unless they have HUGE middle-class+ transactions/income in bank history. So, how are people going to use these fancy currencies? I have lived and visited developing countries, no paypal, no credit-card, no debit card, no bank transfer, only paper-bills accepted :)
When everyone accepts libra, there is no need to exchange libra for hard currencies. Facebook, as the owner and operator of the world's largest social network, believes it can create a closed ecosystem where libra is used for many types of transactions.
Where have you lived/visited? I'm brazilian and almost everyone here has at least a debit card. Some people don't even carry money when they go out. Credit cards are widely used as well.
Developing countries use a good deal of mobile banking. Anecdotally mobile payments make up as much as 50% of all transactions. I am typing this on mobile so can't really post links. Search Mpesa and Ecocash for more information. Card processing machines are also becoming pretty common and it is easy to transfer money from you mobile banking account to a card.
India has no need for Libra, the government owned payment gateway allows for zero transaction fee, instantaneous payments and transfers. BHIM is a consumer wallet/app launched and maintained by the government for the same
Perhaps, but can Indian expats also send money to India via this gateway? Can you use it to order something online from another country? What about the relative weakness of the Rupee vs a mix of reserve currencies?
Libra still makes sense as an "international" currency, even if it doesn't make sense nationally.
> can Indian expats also send money to India via this gateway?
Not yet, but I've heard that this is in the works.
The hardest part of trying to use UPI right now as an Indian expat is that you need an Indian phone number and your bank account should be linked to it.
You are vastly overestimating the sophistication of the US banking system. Integrating with it is incredibly difficult since so many steps rely heavily on trust between parties. For example, information sufficient for direct depositing into someone’s account is sufficient for direct depositing OUT of said account as well.
Unified Payment Interface (UPI) in India is a highly scalable (800million transactions per month) mobile payment method with 160+ banks participating with numerous mobile apps (example: Bhim, PhonePe) that is free of charge for merchant payments and up to 30 person to person payments per month. Subsequent P2P transactions are charged at flat ₹2.5 for < ₹1000 and ₹5 for greater than ₹1000 (highly unlikely anyone would cross the free quota per month and actually pay this fee).
Is it "free" from a customers's perspective, or from a merchant's perspective?
From a customer's perspective, credit cards are also "free". However, from a merchant's perspective, the cost is 2-3% plus a constant hassle with prospective fraud.
My point is Libra isn't needed for person-to-person or person-to-merchant transfers within India.
The international small amount transfer use-case is extremely rare and unlikely to take-off because of Libra.
In any case, you seem to be assuming Libra won't charge forex fees for converting between Libra and fiat currency. They have not said so. It is very likely they will charge.
I don't see any reason why the banks involved in exchanging Libra with fiat currency to behave any differently than they do today. They will play with the buy/sell rates to make money on both sides of the trade.
What is "most other countries"? As far as I'm aware, at least in the Eurozone ATMs also have fees (unless it's the same bank) and bank wires (SEPA) aren't instant either.
Operating ATMs may be "trivial", but it costs money, so why would you serve your competitor's customers cash for free?
Obviously it varies between counties, but here in the UK I can transfer money between my three banks essentially instantly (normally less than 15 seconds), for free. And we were late to the game. The only time I pay to use an ATM is at ones in small corner ships. Bank ones are almost always free, and you can use any bank's machine.
Planet Money did a good episode on why the US system is so bad compared to most other developed countries. Mostly seems to come down to the huge number of small bank's you have, it massively complicates any attempt to roll out a new tech platform.
Most ATMs don't charge a fee, so if your bank doesn't charge one for a withdrawal out of network, you're good. A lot of countries have had pretty good online banking offerings for a while now and free withdrawals at any ATM are typical.
SEPA is over 10 years old now, and while not the fastest protocol, modern banks clear transfers in a couple of hours. Not bad for something that allows you to wire money to some 500 million people. And the newer SCT instant payment scheme is being rolled out as we speak.
Probably trivial because they adopted the tech later and it was easier. The last to modernize, will be the most modern. The US rolls out new tech and charges for it, and at this point charges and fees have been there since the start and there is no reason to remove them. There are banks that will pay the fees, so effectively a free transfer, but it is up to the consumer to select these companies to do business with. It is the old voting with the wallet method.
One factor to consider especially in a country like Zimbabwe where most transactions are done through mobile phones is that electronic transactions are now a cash cow. Traceable and taxable. 2c for every dollar transferred in Zim goes to the government for transactions above 10 dollars. The government is not going to let someone steal their lunch.
Most people are missing the fact that the population of the developing countries will be more interested in the convertability of the Libra coin and its potential stability than the day to day transactions.
Most people in developing countries don’t have access to USD, online transactions or crypto (because of the knowledge barrier).
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[ 3.1 ms ] story [ 93.8 ms ] threadLibra will not require a Facebook account and will supposedly not be tied to a Facebook account, so the danger should be about the same.
Calibra vs Zelle here we come.
plus, facebook payments are already so fast, i can take the money out from an atm one minute after the transfer is initiated.
That won't happen though. Capital needs to flow as freely as possible; and the current players at least make that work. Libra, however, has no substantive purpose in the long run other than to finally tap into the rent-seeking upper layers of the financial system. It seems to be the tech industry's fallback when they can't think of anything more innovative to do. Start up a financial services division, and tap into those delicious fees from the "underbanked".
Make no mistake; the data grab possibilities are real barring explicit intervention by regulators. Any advertisement company based on data collection for ad targeting has far too much potential value to reap out of actually tapping into the transaction details of user's. Having the "world's biggest social network graph" at your disposal on top of a distributed ledger from which can be derived a parallel graph of financial activity represents a gold mine in terms of panoptic levels of informational awareness.
People don't seem to quite get it yet that a big enough pile of seemingly unidentifiable data points can be combined to create something as good as a fingerprint or DNA strand. In government work, this is explicitly highlighted anddrilled into every employee, every year (at least at the Federal level).
Caveat emptor. Embrace your localized economies; beware of those seeking to add you to their "customer base" for the sake of 'your convenience'. They wouldn't be going out of their way to get you onboard if they didn't have anything to gain in the long run.
I am curious how it works when there is a net inflow into the country though.
Libra still makes sense as an "international" currency, even if it doesn't make sense nationally.
Not yet, but I've heard that this is in the works. The hardest part of trying to use UPI right now as an Indian expat is that you need an Indian phone number and your bank account should be linked to it.
Please see statistics published by various agencies: NPCI - National Payment Corporation of India is the organization responsible for administering UPI. https://www.npci.org.in/product-statistics/upi-product-stati...
RBI - Reserve Bank of India is the central/federal bank. https://rbi.org.in/scripts/Statistics.aspx
I don't think anyone needs Libra in India. Thank you.
From a customer's perspective, credit cards are also "free". However, from a merchant's perspective, the cost is 2-3% plus a constant hassle with prospective fraud.
Traditional wire transfer certainly cannot, since the fees alone are many times larger than $1 USD.
The international small amount transfer use-case is extremely rare and unlikely to take-off because of Libra.
In any case, you seem to be assuming Libra won't charge forex fees for converting between Libra and fiat currency. They have not said so. It is very likely they will charge.
I don't see any reason why the banks involved in exchanging Libra with fiat currency to behave any differently than they do today. They will play with the buy/sell rates to make money on both sides of the trade.
Most other countries have this infrastructure already, because technically it’s trivial.
Operating ATMs may be "trivial", but it costs money, so why would you serve your competitor's customers cash for free?
Sepa is not instant but it's miles ahead of ACH
Planet Money did a good episode on why the US system is so bad compared to most other developed countries. Mostly seems to come down to the huge number of small bank's you have, it massively complicates any attempt to roll out a new tech platform.
SEPA is over 10 years old now, and while not the fastest protocol, modern banks clear transfers in a couple of hours. Not bad for something that allows you to wire money to some 500 million people. And the newer SCT instant payment scheme is being rolled out as we speak.
Most people in developing countries don’t have access to USD, online transactions or crypto (because of the knowledge barrier).
Because corruption has been shown to keep some countries from ever getting anywhere.