Is India the Key to Mobile Payments Success for Facebook’s Libra?
Many countries, based on some reports, actually consider Facebook’s Libra an existential threat to their ability to issue currency, and when you go messing around with a government’s money supply, you’re going to get a lot of pushback. Yet we all know that cryptocurrency’s one great new use case is in remittances, and new reports suggest that, if Facebook can just convince India that this is a good plan, it may have a path to success.
Moving money from one place to another can be a challenge, and a pricey challenge at that. This is especially true in India, which is the world’s largest market for remittances. Given that the cost of remittances averages around seven percent on a $200 transfer, and the Reserve Bank of India notes that expats are sending back about $80 billion annually, there’s a real opportunity here to get ahead by offering a cheaper, faster, and better way to get cash back home to the family.
Throw in the fact that India is also Facebook’s largest international market—over 300 million users strong—and it’s clear that Facebook could make a market out of handling Indian remittances, even if it gets nowhere anywhere else.
Essentially, Facebook is walking a toxic concept into a hotly-competitive market. While it’s not out of line to suggest that Facebook could make a hit here—it’s doubtful the Venn diagram of Paytm and Facebook users is one big circle—it’s going to be difficult by literally any standard. Facebook is going to have to break inertia and draw users out of their current platforms since the rivals are already entrenched with markets of their own. They might be able to work the convenience angle—you’re already using Facebook so why not use Libra?—but that may not get them very far.
This isn’t good news for Facebook, whose program already has drawn a lot of hate from people who make laws for a living. Still, there’s a chance of success, and with Facebook increasingly distrusted, it needs revenue coming in somewhere.