Facebook will work out of London to drive global WhatsApp mobile payments
Facebook, the world’s largest social media platform, is looking to monetise its market-leading messenger app WhatsApp. That’s been the plan for a while, but various elements, such as a spate of scandals over privacy and politics, have stymied the company’s attempts so far. Now, it looks like that’s about to change, as Facebook has announced it’s created a hub of around 100 people, including long-time WhatsApp engineers, in London. The goal is simple: develop a world-class payments initiative that will finally see Facebook capitalise on the huge financial potential WhatsApp represents.
Facebook’s share price has appreciated by 41% year to date
Source: Yahoo Finance
Facebook said London was an obvious choice because it routinely attracts talent from some of WhatsApp’s biggest markets – most importantly, India. India is really the territory that WhatsApp is desperate to conquer. Partly, that’s for the same reason as everyone else: India is generally seen to be at the beginning of a journey similar to that of China over the past few decades. And partly, it’s because WhatsApp has a major head start in the country, with more than 200 million users already.
Last year, Facebook started its monetisation of WhatsApp in India by rolling out a mobile payments trial. But regulatory disputes and concerns about problematic content on the platform has slowed progress, making room for challengers like Alphabet and Alibaba to gain a foothold with their own mobile payment apps. The solution, according to Facebook, is better safety and spam-combating – something the new London team will be focussing on.
While it’s still early days for WhatsApp’s mobile payment system, this is a push that has long been expected from Facebook. As Big Tech continues to push further into financial services, investors should expect Facebook to be a part of it.
Dominion holds Facebook in its Global Trends Ecommerce Fund.
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