Following Facebook’s recent announcement that it will be launching a digital currency called Libra,
Bhavika Shah, Payments Analyst at GlobalData, a leading data and analytics company, offers her view:
“Offering electronic payments to cash-dependent consumers is not an untapped market in regions like Asia, where Libra will try to differentiate from its competitors by launching its digital currency on a global basis in an attempt to replace other financial systems and catapult itself to the status of a pre-eminent global bank or even a government.
“However, its foray into the market comes quite late – the global unbanked are already being served by a variety of mobile money or mobile wallet providers domestically where Facebook will face fierce competition from incumbent players like Paytm in India, WeChat and Alipay in Southeast Asia, together with various mobile money providers in the Middle East and Africa. Statistically, according to GlobalData’s 2018 Mobile Wallet Analytics, over half of respondents have a mobile wallet in India and China and use it to make payments.
‘‘Many of these providers, like Paytm, WeChat, and M-Pesa, are heavily entrenched in local economies and will be difficult to dislodge for a new entrant, even one with a brand and userbase as strong as Facebook’s.
‘‘Libra does offer a global framework for peer-to-peer transfers, which is important given the prominence of remittances in developing markets, but domestically Libra has a steep hill to climb in markets like Asia.”
