this is what you need to know about it

WhatsApp is rolling out a payment solution in the WhatsApp beta for the first group of American users. You can send money to other users via Meta’s Novi payment service. We explain what you need to know about this function that will also be on the rise in the Netherlands and Belgium.

WhatsApp payments

You could recently read on Androidworld that a payment system for WhatsApp is one step closer. In the US, Meta wants to test a payment system that relies on its own Novi wallet. WABetaInfo now reports that the first users in the United States can now get started with the system. It works in the latest beta of WhatsApp for users who activate it from the Novi app.

Meta makes no bones about it and wants to roll out the payment formula via Novi to more countries in the long term. It is not yet known when we will see this in the Netherlands and Belgium. What exactly can we expect from the payment solution? How did she come about and what is Novi?

Calibra and Libra get resistance

Those who regularly follow the tech news will probably have seen regular updates about the ambitions for payment services from Meta, formerly Facebook. You may also have noticed that different names were mentioned for the company’s payment service.

The service was first introduced as “Calibra” in June 2019. It would be a standalone app that served as a digital wallet. You can buy crypto coins with normal money, which allowed Facebook to enable instant payments with limited transaction costs for the users. Calibra would be integrated into any of the company’s social media app.

The own cryptocurrency that Facebook put forward was called ‘Libra’, but regulators in the US and EU, among others, were not exactly enthusiastic about a large tech company that is challenging financial institutions with its own crypto coin. PayPal, a key partner in the project, subsequently decided to exit the initiative in October 2019. A few weeks later, Ebay, Mastercard and Visa also followed suit.

Novi and Diem, a new beginning

You can safely call this a major setback for Facebook, which a month later proposes another payment solution under the name Facebook Pay. It was a more traditional payment solution, separate from Calibra, for which Facebook partnered with Mastercard, Visa and PayPal. Also for this system it was intended that it would have a place in all social media apps.

Still, Facebook hasn’t shelved its plans with its instant payment solution. In May 2020, Calibra was renamed ‘Novi’ and a few months later, the Libra coin was also renamed ‘Diem’. Facebook released Novi in ​​October 2021 in the US and Guatemala, but without the Diem coin.

Hard to gain trust

The idea behind Diem is that the cryptocurrency works as a so-called stable coin or a digital currency like Bitcoin, but without the known volatility. Large price fluctuations make a crypto currency less suitable as a means of payment. An important difference between Bitcoin and Diem is that the latter is not decentralized, according to a blog post by Diem. Meta – as the company is now called – is the only player that influences the price of its crypto currency and it is not possible for third parties to ‘mine’ Libra coins. So in doing so, it’s posing as a sort of central bank for Diem coins, and that may be one of the reasons Meta is struggling to gain the trust of financial regulators.

However, Meta did not want to wait any longer with the rollout of Novi and integration with WhatsApp. Novi is therefore now temporarily using another stable coin then Diem. The cryptocurrency is called ‘Pax Dollars’ and it can also make fast payments. In its own words, Meta will only start working with Diem in Novi once the necessary agreements have been made with financial regulators in the US. After that, Meta can expect the same process in European countries.

When in the Netherlands?

Does that mean that it will take a long time before we find the Novi integration in the Netherlands when we open WhatsApp? That doesn’t have to be the case, because there’s nothing stopping Meta from making Novi more widely available through the current payment solution with Pax Dollars. Once the test phase with Novi in ​​the US and the integration with WhatsApp are successful, it seems plausible that Meta will then focus on other European countries. It is not yet known when that will be the case.

WhatsApp is also not the first messaging app to have a direct payment solution built in. In China, the payment solution of chat app WeChat is a very popular payment method. WeChat Pay – part of Tenpay – is the second most popular payment service after Alipay, according to figures from Statista. It is even so popular that the Chinese have been able to pay via the service at Schiphol for a few years now.

Facebook Pay soon part of Novi?

Unlike Novi’s payment solution, WeChat Pay is not an instant payment solution, because the service is simply linked to the user’s bank account. That’s more reminiscent of Meta’s plans with Facebook Pay. You know that more traditional payment solution that will work via PayPay, Mastercard and Visa. Facebook Pay is also expected to get a sequel in Novi and WhatsApp. With the name change from Facebook to Meta, the company announced that all financial projects of the company will fall under the Novi name in the future.

What do you think of Meta’s plans with Novi in ​​WhatsApp? Would you like to use the service, or would you rather prefer a traditional payment solution based on the idea of ​​Facebook Pay? Let us know in the comments at the bottom of this article.

Most popular news about Meta: