Facebook creates financial unit for digital payments

SAN FRANCISCO: Facebook has created a new unit devoted to financial services for payment systems on its platform.

The new group, called Facebook Financial, will be headed by e-commerce veteran David Marcus, who was a president at PayPal before joining the leading social network six years ago.

Marcus is one of the creators of Facebook’s digital money network Libra, and heads the team building a Novi digital wallet tailored for the currency.

The Novi wallet promises to give Facebook opportunities to build financial services into its offerings, offer to expand its own commerce and let more small businesses buy ads on the social network.

Facebook Financial will handle management and strategy for all payments and money services across the company’s platform.

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The Federal Reserve last week revealed plans for its own instant payments system while noting security concerns posed by Facebook’s yet-to-be-launched digital currency Libra.

FedNow will provide households and businesses with instant access to payments, wages, government benefits, or sales without waiting days for checks to clear, the Fed said.

The central bank said the system, which is not due to launch for two to three years, “will be designed to maintain uninterrupted 24x7x365 processing with security features to support payment integrity and data security.”

Facebook’s announcement last year to launch the Libra cryptocurrency and payments system raised immediate red flags for global finance officials who criticised the security and reliability of a private network.