Everyone by now has heard, David Marcus, the CEO of PayPal has resigned from PayPal and is now going to Facebook to head Messenger. I’ve been advocating for years that Facebook will get into the payments space. I have countless posts on Quora that will testify to that fact. A lot of people kept shunning me, saying Facebook will never get into payments, citing one reason or the other.
With David Marcus jumping ship, I feel vindicated (almost). To be honest, I feel like Daniel Negreanu when he calls out cards of his opponents (in Poker). I explained my instinct about Facebook getting into payments earlier on on Quora (Why are start-ups or Facebook itself not using Facebook’s larger user base for money-transfer services?), which was part of a larger article I wrote Facebook forays into the world of online payments.
Facebook has been acquiring money transmitter licenses for a while now. They were not doing this just for the fun of it – there was/is a greater plan.
If you look at China, the success of Tencent’s app WeChat in the payment’s space has been nothing short of spectacular. Baidu is the other player that recently entered into the mobile payments space in China as well. AliPay which has 750+ Million users, is the world’s largest eWallet provider. Tencent’s WeChat and their 355+ Million mobile wallet users is huge in the mobile payments space. No one in the world can rival the success of WeChat. The only other viable contender is Facebook.
Human behavior has some very simple traits. Communicating (chatting) is perhaps the simplest and most common trait when two people meet up. On a recent post by Brian Roemmele on Quora: I cited the following reasons for David Marcus wanting to jump ship:
Facebook offers everything that David Marcus would want:
- It has a very large (virgin to payments) user base
- It has a chat client (Facebook Messenger and WhatsApp)
- It has the ability to add on apps to the messenger (just as WeChat has)
- PayPal does not have any of these elements as listed above
- The culture at Facebook was not very conducive to the operating style of David Marcus. (So many insiders whom I know at PayPal have cited this). Even Rakesh Agrawal tweeted about it..
There is no doubt, this is a great win for Facebook. Recruiting David Marcus is perhaps the best move they could have made. Very few people know the payment’s landscape very well from a 100,000 feet. David Marcus is one of the few ones, who not only knows how the entire ecosystem looks like, but has some inside knowledge of PayPal and its plus/minus points and how Facebook could possibly leverage them.
Remittances will definitely be something that Facebook would eventually embrace, however, because of David’s background, I personally think P2P payments is what he will strive after, putting those money transmitter licenses to use.
All in all, PayPal is now a ship without a captain. It would be interesting to see if they bring someone from the outside, or from within eBay. The morale as of yesterday isn’t all that good. Its somber.
David Marcus can very well pull it off. Making a world class payments platform that ties 100s of countries together. Very few people in history have been given this chance, I for one am hoping he pulls through. Best of luck – for you will need it.