Hacker News Reader

Comment by jonlucc | Hacker News Reader

I don't really understand the upside to an FB stablecoin, but maybe I'm missing something. Why would I want FB to be the store of my money instead of FDIC-backed banks if the value and purchasing power is going to be identical?

View on HN

If they can move your money cheaper than credit and debit card networks. That is the only part I'm interested in. Given they are partnered with PayPal though, I'm not hopeful on it being low fee.

That makes sense, but when buying things, the price of those networks is opaque to the consumer and things won't get cheaper for consumers if a business is selling to both "traditional" purchasers and FBcoin purchasers.

Yea, agreed. My dream for it would be changing the way the internet is funded. If you could send 1 or 2 cents digitally, you could bill people for social media use rather than showing them ads. You could tip content creators and not have a payment network take 30%, same for in app purchases. The kill ads feature doesn't align with FB's interest though.

We'll see what their fee structure looks like.

Those fees with credit and debit card networks aren't arbitrary - they usually cover dispute support, insurance, anti-fraud, and other financial services that consumers have come to expect.

If Facebook has fees that are less than industry standard I would be highly suspect of that payment method.

They're not arbitrary, but they're not razor-thin, either. If we take a quick look at profit margins (net income over revenue) for 2017 as a proxy for fees relative to service costs, Visa was something like 36%, which is pretty good (for context, Google's is ~22%, Apple's is also ~22%, Citigroup is ~25%, Mastercard ~31%, Paypal ~13%, Facebook is just under 40%).

It would definitely be a big shift from the "support" they offer now, admittedly, but if they can break the Visa/MC duopoly at scale, I think you could make a business case for it.

What these financial conglomerate accountants report on their SEC filings are not the same margins that they have on payment processing. For example, much of that margin could be on interest for credit debt or Adwords CPC. It's a massive stretch to compare the two.

Again, I would be highly suspect of Facebook if they charged less than the industry standard, especially if they don't explain how they cut costs for risk management.

I think risk management could be a lot cheaper. Phones are data rich compared to mag stripe cards. No card can provide GPS history.

I agree - I think some startups like SoFi have been challenging that space, but they address that in their value proposition. I don't see anything leading me to believe that anything Facebook is doing is innovating risk management overhead, which is why I would be suspect of their fees.

You don't have to store your whole net worth in it, just use it as a hot wallet. In China you go buy some noodles and you pay via WeChat (a chat app). Facebook wants to do the same, you'll be able to split bills/send money via FB/Whatsapp with a couple of clicks.

Reply on news.ycombinator.com