Facebook's proposed electronic wallet Novi is "ready to come to market", according to David Marcus, the company's head of financial products. The service has received regulatory clearance in most US states and appears set to launch there first with free person-to-person payments.
In a lengthy blog post, Marcus outlined Facebook's interest in setting up its own currency and what a well-functioning 'stablecoin' would look like. While much of the media focus has gone to this aspect of the project, Marcus said the success of any such product will first require an underlying payments network "that’s cheaper, faster, safer, interoperable and programmable". This is where the Novi electronic wallet, previously known as Calibra, comes in. Novi is designed to "fix our broken payment system" and help the some 62 million unbanked or under-served Americans access financial services, Marcus said.
In the US, there is no national electronic banking system, with the existing clearinghouse system for interbank payments dating to the 1970s. Many people avoid banks due to high, unexpected fees for basic services and prefer to rely on cash or the growing number of mobile and online payment systems. The Novi wallet will attempt to address these shortcomings and offer free person-to-person payments domestically and internationally.
Similar to Facebook's other services, Novia will be offered free to start while it scales up, with monetisation coming later, according to Marcus, who previously led Facebook's messaging activities. "We trust that people will prefer a service that is cost free and more convenient to ones that are significantly more expensive and not consumer-centric," he said. Once it has a significant customer base, Novi can sell services to merchants and businesses for profit and expand to other types of financial services with partners.
Marcus said the group was "confident in our operational ability to exceed the high standards of compliance that will be demanded of us". The service is expected to scale gradually, with Novi customers still required to register, provide ID and comply with other local regulations.
No timing for the launch of Novi was given. "We feel that it’s unreasonable to delay delivering the benefits of cheaper, interoperable, more accessible digital payments," Marcus said. "We will continue to persevere and demonstrate we can be a trusted player in this industry — and one that’s bringing positive change by being in it."
