SQ

Facebook announced details yesterday of a new cryptocurrency, libra. Basically it’s a way for people to pay for things with zero fees. Targeting the unbanked.

https://techcrunch.com/2019/06/18/facebook-libra/

They have signed up many partners, Mastercard, Visa, Uber, Lyft, etc, and will share the responsibility of managing libra with the partners.

https://mashable.com/article/facebook-libra/

I expected SQ to be down on this news, but its basically flat today. Clearly more competition for the Cash app and Squares goal of helping the unbanked.

It’s interesting Paypal is a partner when they have Venmo.

I think banks are going to have a hard time, everyone is trying to find ways to reduce the massive fees they charge.

Jim

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I think banks are going to have a hard time, everyone is trying to find ways to reduce the massive fees they charge.

Two related things:

  1. The customers banks really want have enough wealth/income to easily avoid fees.
  2. Banks don’t really want customers that are risky to be banked (or that otherwise struggle to maintain balances). That sort of fits the definition of unbanked.

On the contrary, banks probably welcome the idea that there might be an alternative for individuals too risky to be banked to put their hand-held cash into the hands of Facebook - who will turn around and put it in banks. Such is probably why credit card companies signed up for the project too.

Basically it’s a way for people to pay for things with [nearly] zero fees.

You were missing a word from your quote. There will be transactions costs. The article states “fractions of a cent” in some cases but who knows. PayPal certainly isn’t that cheap from what I recall.

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