Western Union stocks fell 1.7 percent, making the company one of the worst performing ones on the S&P 500 index. Libra is expected to debut sometime before July 2020.
Libra is going to offer cross-border, or remittance, payments — and people who want to send money to other countries could use Libra to do so and eschew the fees charged by Western Union.
In order to facilitate this, Facebook has partnered with companies like PayPal, Mastercard and Visa. The issue is that money exchanged between consumers makes up about 80 percent of Western Union’s revenue, and Facebook could potentially eat into that.
PYMNTS CEO Karen Webster recently wrote about what Libra would mean for the company.
“The announcement today establishes Libra as the foundation for a new, low- or no-cost, global payments and financial services ecosystem, one built by Facebook, to give billions of people access to the ‘internet of money’” she said. “This ecosystem consists of that new network, a new global currency and governance system that puts control of Libra in the hands of an association of financial services and payments industry stakeholders. The ecosystem’s first application is a stand-alone digital wallet, Calibra. The Calibra wallet is a product offered by a stand-alone subsidiary of Facebook by the same name,” she described.
Libra is the product of not just Facebook, but a plethora of partners in the space.
Webster added, “Twenty-eight of the who’s who in payments, marketplaces and venture investing have a seat at the Libra table as Founding Members. They are being asked to contribute their collective experiences in operating global, regulated payments and financial services networks to shape Libra’s charter and frame its governance structure. At some point, they will be asked to kick in a few bucks to fund its operation and get it off the ground. Many of those players are also the very same players that Libra would seem, at first blush, to displace if its vision of creating a new global payments infrastructure really takes off,” she said. “That makes today’s launch not the end of a process for Facebook in creating that vision, but the beginning of one that will determine Libra’s future — even perhaps whether it will have a place in the future of how commerce will happen on a global scale.”