|Bid||173.48 x 800|
|Ask||173.49 x 900|
|Day's Range||171.75 - 173.55|
|52 Week Range||121.60 - 173.55|
|Beta (3Y Monthly)||0.86|
|PE Ratio (TTM)||35.83|
|Earnings Date||Jul 23, 2019 - Jul 29, 2019|
|Forward Dividend & Yield||1.00 (0.59%)|
|1y Target Est||181.49|
Tech giant Facebook consulted the Federal Reserve ahead of the launch of its cryptocurrency Libra, according to Fed Chairman Jerome Powell.
Delivery startup Rappi is partnering with Visa Inc to offer a prepaid card linked to its digital wallet in Brazil, expanding the product's rollout from Mexico and Colombia, where Rappi was founded, executives from the two companies told Reuters. "It is the first of many financial solutions we plan to offer to our users," Rappi co-founder in Brazil, Ricardo Bechara, said in an interview on Tuesday. Singapore-based Grab, which has a similar business to Rappi's in Asia, struck a deal with Mastercard last year.
(Bloomberg Opinion) -- It's one thing for academics in Asia to rant against the tyranny of the dollar, or to make cheery forecasts about its impending eclipse by the Chinese yuan. But now that Facebook Inc. wants to spawn a new global currency – one that could meet the “daily financial needs of billions of people” and perhaps rival the greenback one day – central banks in Beijing, Jakarta, Manila or Mumbai won't exactly be ecstatic.To them, the prospect of being at the mercy of a cabal of tech czars and venture capitalists sitting in Switzerland could well mean swapping the yoke of the U.S. Federal Reserve for a less predictable and potentially more sinister dependence.What if Facebook's crypto, backed by fiat-currency assets and offering stable value, starts out by paying for coffee but over time becomes people's preferred store of wealth? What will it mean for monetary sovereignty? Suppose users of Libra, as the currency will be called, manage to set aside their outsize privacy concerns with Facebook. Were the tokens to take off and – against all regulatory odds at home and abroad – gain global acceptance, there will be several implications for governments around the world.Some of them will be of particular concern in Asia, where most of the larger economies, starting with China, yearn for a growing role for their currencies in international commerce and as a store of value. Americans enjoy everything a little cheaper because the world – including money launderers, drug dealers and terrorists – wants the U.S. currency, which only the Fed can manufacture. China wants the same privilege for itself; and in a decade or two, India and Indonesia will, too. However, the long, patient game of internationalizing the yuan would get complicated if the Chinese on the mainland themselves take to Libra to bypass the country’s increasingly invasive social scoring system.Shielded by capital controls, Asian central banks at times seek weaker currencies to stimulate their export-led economies. But if people can move their wealth with one scan of a QR code to a digital coin backed by a reserve of low-risk assets – including bank deposits in various currencies and U.S. Treasuries – such stratagems won’t work any more. The People's Bank of China could then respond with its own digital currency, and unlike Facebook, pay interest on it.(2) Other central banks may join the battle for continued relevance. This competition, and not devaluation, could end up becoming the real currency war of the 21st century.None of us has experienced a central bank-sponsored digital currency yet: Our online payments are mediated by commercial banks or fintech. But it’s not a far-fetched idea. Seventy percent of the monetary authorities surveyed by the Bank for International Settlements last year said they’re working on the concept. So far they’ve had no reason to take the leap. Central banks already make digital cash available to financial institutions. Those are called bank reserves. Presumably, the Switzerland-based Libra Association, which will also include Visa Inc., Uber Technologies Inc., venture capitalist Andreessen Horowitz and other founders apart from Facebook, will also rely on a “geographically distributed network of custodians” to tap this closed user group for reserves.Nothing stops a central bank from providing its own digital tokens via commercial banks to compete with Facebook. If that doesn’t do the trick, the monetary authority can pull the ultimate stunt: It can open up its balance sheet to the public. Groups like the U.K.-based Positive Money, which is advocating for “Britcoin” to be held by individuals directly with the Bank of England, see it as the ultimate antidote to “extractive middlemen like banks and now tech companies.” Such a step would carry risks. In normal times, commercial banks can retain customer deposits by paying higher interest. But when panic strikes, deposits might flee to the central bank, even if the latter imposes a negative interest rate. Monetary authorities don’t want a funding shock to their banking systems. However, were Facebook to pose an existential threat, they may be compelled to walk an untrodden path.New purchasing power will increasingly come from Asia and Africa where the demographics are still favorable for high income growth. To the extent that global tech avoids paying national taxes when this purchasing power turns into digital consumption, it’s already a headache. Were Libra or another such project backed by the technology industry to take over where the dollar leaves off, concerns around a fair share of taxes could multiply. For that reason alone, Libra may not end up going anywhere in Asia. (1) The Libra Association will use its income to pay operating expenses, and then to compensate early investors in the consortium.To contact the author of this story: Andy Mukherjee at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Line Corp., Japan’s largest messaging app, is close to getting a license to launch a cryptocurrency exchange in its home nation, according to people familiar with the matter.Japan’s Financial Services Agency could issue the license as early as this month, with exchange operations starting a few weeks after that, said the people, asking not to be identified discussing private matters. The service, which will be called BitMax, will allow Line’s 80 million users in Japan to buy and sell cryptocurrencies including Bitcoin and Line’s own token Link, one of the people said. Shares rose as much as 4.6%, the most intraday in two weeks.Line joins a crowded field of tech companies racing to roll out cryptocurrency products, including a move from Facebook Inc. earlier this week to create its own financial system with Visa Inc. and Uber Technologies Inc. For Line, the pressure to succeed is particularly acute as stagnant user growth has pushed shares to their lowest since listing in 2016. The Japanese company booked a loss last fiscal year as it stepped up investments into new businesses to reduce its reliance on advertising revenue.Line spokeswoman Icho Saito declined to comment.BitMax will use the same back-end technology as BitBox, a Singapore-based crypto exchange that Line launched last year for global users, according to one person. BitBox is off limits to users in Japan because of the licensing issue and so far hasn’t delivered a big boost to the company’s earnings. Exchange volume over the past 24 hours was about $2 million, according to its website.Line is still awaiting a separate banking license in Japan that will allow deeper integration of cryptocurrencies with its other services like online shopping. That license is unlikely to be issued until next year, according to one person. Line aims to debut stock brokerage operations this year with Nomura Holdings Inc. and banking services next year with Mizuho Financial Group Inc., co-Chief Executive Officer Shin Jung-ho said this month.Facebook this week announced its new crypto project Libra, a so-called stablecoin that is expected to let users send and receive money, shop online and invest through the social media platform. In Japan, tech companies including Rakuten Inc. and Yahoo Japan Corp. have launched their own crypto exchanges this year after receiving licenses from the FSA.Crypto’s growing adoption by large companies is contributing to a rebound in prices this year, with Bitcoin more than doubling over the past three months. Line’s own token Link has almost doubled in June alone, giving it a market valuation of about $30 million. It’s one of the few cryptocurrencies in the world that is issued by a large listed company.(Updates with shares in fourth paragraph.)To contact the reporters on this story: Yuji Nakamura in Tokyo at firstname.lastname@example.org;Yuki Hagiwara in Tokyo at email@example.com;Pavel Alpeyev in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The Senate Banking committee on Wednesday set July 16 as the date to hold a hearing centered on Facebook Inc.'s Libra coin, an ambitious cryptocurrency venture led by the social-media giant that is intended as a frictionless way to to make payments over the internet using blockchain technology. The hearing titled "Examining Facebook's Proposed Digital Currency and Data Privacy Considerations," comes after a number of Congressional lawmakers a day ago demanded that Facebook , which is leading the digital-payments venture, delay its attempt to roll out the cryptocurrency by the second half of 2020 as planned, while legislators review possible risks to consumers. House Financial Services Committee head Maxine Waters on Tuesday said Facebook "is continuing its unchecked expansion and extending its reach into the lives of its users." The social-media outfit is wrestling with privacy concerns following its Cambridge Analytica scandal. On Tuesday, Facebook said: "We look forward to responding to lawmakers' questions as this process moves forward." Facebook has been meeting with regulators about its cryptocurrency plans, according to the Wall Street Journal, which reported that Facebook officials have met with Securities and Exchange Commission as its prepares to kick off Libra Coin with more than two dozen partners, including payment company PayPal Inc. [sL PYPL], ride-hailing apps Uber Technologies Inc. and Lyft Inc. , as well as credit card company Mastercard Inc. among many others. Many view this crypto as a powerful way for Facebook to tap into its 2.5 billion monthly active users. Libra coin won't be owned by Facebook and will be governed by a consortium of qualified global partners, with the intention of creating an independent payment system that has the benefits of the immutable ledger technology behind cryptos but none of the price vagaries of bitcoin because the digital asset will be pegged to a basket of fiat currencies like the dollar and euro , for example. Facebook's shares finished 0.5% lower on Wednesday, while the Dow Jones Industrial Average , the S&P 500 index and the Nasdaq Composite Index all finished in the session in positive territory.
(Bloomberg) -- Facebook Inc.’s bid to create a new cryptocurrency has the potential to some day disrupt the global money system, analysts say. That’s if the new stablecoin, called Libra, can gain enough traction. In the meantime, they say, the plan probably means little for existing payments companies, like Mastercard Inc., Visa Inc. and PayPal Holdings Inc. -- which are all partners with Facebook.Shares of Mastercard, Visa and PayPal were mixed in mid-day Wednesday trading, ahead of the conclusion of the latest Federal Reserve meeting. Facebook was down as much as 2.1%.Here’s a sample of the latest commentary about the new cryptocurrency:Cowen, George Mihalos, Jaret Seiberg“If successful – if – it could be very disruptive to the legacy interchange model developed by the networks and banks,” Cowen analysts wrote in a note. Libra may also be “price-eroding to processors,” and serve as a “shot across the bow to money remittance firms.”Their expectations aren’t all bad for existing financial firms. Libra offers potential to bring “new money” into the digital payments ecosystem, they said, which would add to the value stored in digital wallets, like PayPal’s. That may lead to greater account adoption and transaction growth, though costs will probably come under pressure, as “Libra will in many ways be akin to using cash.”They also warned that politics pose a risk to Facebook, with Congress likely to hold hearings in the next few months. “Washington has the power to end Libra and any other cryptocurrency,” they said, by denying access to the banking system, making converting the currency to cash impossible. Congress may also adopt legislation that imposes onerous anti-money laundering and public audit requirements.MoffettNathanson, Lisa EllisThe announcement may be “most important for the cryptocurrency world,” and less so for payments companies, Ellis wrote in a note after discussing the plan with Visa, Mastercard and PayPal. “The cryptocurrency ecosystem may finally have a crypto-based system that – in design, at least – meets the major criteria required to make it functional for payments.”Libra has passed Visa, Mastercard and PayPal’s litmus tests, she said. They “see enough potential in the system to have raised their hands to participate – the first significant endorsement of the viability of cryptocurrencies from the incumbent payment ecosystem.”Citi, Ronit GhoseLibra “could be a big thing,” as the “support of Facebook and other internationally active partners will provide at minimum, a lot of public exposure to stablecoins and specifically to the Libra project.”Citi questions how regulators will respond to Libra.“For instance, Japan and Singapore consider coins pegged to a legal fiat as e-money,” while China, India and Indonesia ban dealing in virtual currencies, and Libra might fall under the SEC’s purview in the U.S. “The creation of ‘private money,’ even if fiat-linked, will raise a lot of political and regulatory debate.”Morgan Stanley, Brian Nowak, Betsy Graseck, James FaucetteMorgan Stanley analysts see little threat Libra will disrupt current global payment networks, noting Visa and Mastercard have “significant scale advantage, mature fraud detection capabilities and low cost structure.”They ask whether facilitating cross-border payments -- the only thing that’s not already present in today’s real-time banking system -- will be enough to differentiate Libra from other services, including Zelle and PayPal’s Venmo. They note that JPMorgan’s Interbank Information Network (IIN) is a blockchain that currently offers anti-money laundering and know-your-client (AML/KYC) services, with 259 banks and payments as a use case.KBW, Sanjay SakhraniThe initiative isn’t an immediate threat to payments companies, Sakhrani wrote in a note. “While the use case appears compelling for the underserved, adoption at a much broader scale will be required for Libra to emerge as a viable alternative to existing payment ecosystems.”Libra seems different than other cryptocurrencies, as it solves at least some issues, including volatility in value. Also, sponsorship from a large platform like Facebook may “help with the problem of adoption, although we believe that barriers to scale are likely still high, particularly in regions where a well-functioning payments ecosystem exists.”Wolfe Research, Darrin PellerThe most likely medium-term impact may be on “P2P, cross-border remittance, and the global underbanked,” Peller wrote in a note. He doesn’t see a near-term use case for Libra disrupting the payment system in “financially developed markets outside of remittance.”He sees opportunities for PayPal to fund Libra wallets/transactions and assist merchant acceptance, but adds that there are “long-term questions on potential pressure around e-commerce fees if Libra gains ubiquity.”To contact the reporter on this story: Felice Maranz in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Catherine Larkin at email@example.com, Steven Fromm, Janet FreundFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Facebook Inc. made a renewed push into payments on Tuesday, announcing plans for a cryptocurrency called Libra.Read More: Facebook Wants Its Cryptocurrency to One Day Rival the GreenbackIt will be governed by the Libra Association, a group of companies that will have an equal say in how the cryptocurrency is managed. Almost 30 firms have joined and Facebook hopes another 70 or more will enter the fold in the future.Read Facebook’s Project Libra white paper hereWho’s In:Visa Inc. and Mastercard Inc., the world’s largest payments networks, as well as PayPal Holdings Inc. are on board. For Visa and Mastercard, it’s a chance to offer the world of cryptocurrencies the same services they provide in card payments. All three companies know the challenges of building a network and can offer expertise in encouraging consumers to use the instrument and cajoling merchants into accepting it.Companies such as Uber Technologies Inc., Lyft Inc., and Spotify Technology SA keep millions of credit cards on file, and they risk losing customers when people get a new card or number. E-commerce firms also pay higher “card not present” rates when processing payments, so anything that can reduce these expenses is welcome.“Libra has the potential to bridge the gap between traditional financial networks and new digital currency technology, while reducing the costs for everyone,” said Peter Hazlehurst, head of payments at Uber.International companies, including e-commerce firm MercadoLibre Inc. and telecom giant Vodafone Group Plc, signed onto Libra, too. Blockchain technology and stablecoins are potential solutions for the messy world of cross-border payments, which suffers from delays and high costs.Who’s Out:Large banks, including JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc., already have their own payments businesses that reap billions of dollars in fees. With regulators still deciding how to treat cryptocurrencies, banks and investment firms are treading cautiously.So far, no large brick-and-mortar retailers, such as Target Corp. and Walmart Inc., are taking part. The industry is always interested in lowering the cost of accepting payments, but traditional merchants have historically been hesitant to accept cryptocurrencies due to volatility and lack of consumer adoption.The largest U.S. technology companies, Microsoft Corp., Apple Inc., Alphabet Inc.’s Google and Amazon.com Inc., are noticeably absent. Many of these firms have their own digital payments businesses and some are experimenting with blockchain technology. Apple has poured scorn on Facebook for repeated privacy missteps and other big tech firms are trying to avoid being associated with the social-media giant.“This is very early -- 27 organizations right now, 100 by the time we launch,” David Marcus, head of the Facebook blockchain team that’s spearheading the project, said in a Bloomberg Television interview. “And by that time, I definitely expect to see banks in there, I definitely expect to see other large technology companies and I definitely expect to see more diversity of organizations in terms of geographical distribution.”Square Inc. Chief Executive Officer Jack Dorsey is a cryptocurrency fan, but even his firm isn’t part of Libra at launch. Square’s cryptocurrency team made its first hire last week and it’s Cash App is a popular way for consumers to buy and sell Bitcoin.Here’s the full list of founding members and partners:Andreessen Horowitz Anchorage Bison Trails Booking Holdings Inc.Breakthrough Initiatives Facebook’s CalibraCoinbase Inc.EBay Inc. Farfetch Ltd.Iliad SA’s Free Lyft Inc.Mastercard MercadoLibre Inc.’s Mercado Pago PayPal Naspers Ltd.’s PayURibbit Capital Spotify Technology SAStripe Inc.Thrive Capital Union Square Ventures Uber Visa Vodafone Group Xapo Creative Destruction Lab Kiva Mercy Corps Women’s World Banking (Updates with comment from Facebook’s David Marcus in 10th paragraph. A previous version of this story corrected Creative Destruction’s name.)To contact the reporters on this story: Jenny Surane in New York at firstname.lastname@example.org;Julie Verhage in New York at email@example.com;Kurt Wagner in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Alistair Barr, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- If Facebook Inc.’s new digital currency goes according to plan, it could one day compete with payment giants Visa Inc., Mastercard Inc. and PayPal Holdings Inc. But for now, all three are set to work with the social-media company on the venture.The currency, called Libra, will launch as soon as next year. It’s what’s known as a stablecoin, one that can avoid massive fluctuations in value so it can be used for everyday transactions. Industry experts and insiders say the payments companies want a seat at the table to help shape the new currency.Read Facebook’s Project Libra white paper here“It’s not unusual for the incumbents -- Visa, Mastercard, PayPal -- to partner with a disruptor,” Harshita Rawat, an analyst at Sanford C. Bernstein, said in an interview. “They would at least want to participate in how this product is being developed.”New payment methods such as Apple Pay and other mobile wallets are often slow to take off, so any competition is likely to be years away. Still, the earlier payments companies come to the project, the more time they have to ensure their businesses don’t suffer.None of these companies has been shy about pursuing collaboration or other strategic opportunities. PayPal alone has spent billions of dollars buying or investing in potential partnerships as well as competitors. While PayPal hasn’t ventured into cryptocurrencies before, it was a proponent of the blockchain technology that will be used to build Libra.Visa and Mastercard are always looking to embed themselves in emerging payment forms. Both have developed partnerships with cryptocurrency and blockchain firms. They’ve said that Libra can help more people gain access to financial products.“We think cryptocurrencies can address use cases that are not really well served today,” such as areas where cash-based payments remain prominent, said Jorn Lambert, executive vice president of digital solutions at Mastercard. “As such we think it will be incremental to what we do and not a replacement of it.”The payment companies are part of the Libra Association, giving them a say in how the cryptocurrency is managed. There’s currently no time commitment, so members can leave at any time. Once the group’s charter is finalized, there will be a minimum time commitment, according to some members of the group who asked not to be identified discussing private matters.“My sense is that they will try their best to partner and engage with Facebook,” Rawat said. “If Facebook takes the angle that they want to disintermediate card payments, then I think they may not want to participate.”Facebook shares rose 1.4% to $191.61 as of 11:12 a.m. in New York after announcing the cryptocurrency venture.(Updates with shares in final paragraph.)To contact the reporters on this story: Julie Verhage in New York at firstname.lastname@example.org;Jenny Surane in New York at email@example.com;Kurt Wagner in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Mark Milian at email@example.com, Dan Reichl, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Facebook has unveiled Libra, a new type of money that could eventually become the world’s first widely used cryptocurrency.
(Bloomberg) -- Facebook Inc. unveiled plans for a new, global financial system with a broad group of partners from Visa Inc. to Uber Technologies Inc. on board to create a cryptocurrency it expects will one day trade much like the U.S. dollar and inject a new source of revenue.Called Libra, the new currency will launch as soon as next year and be what's known as a stablecoin–a digital currency that's supported by established government-backed currencies and securities. The goal is to avoid massive fluctuations in value so Libra can be used for everyday transactions across Facebook in a way that more volatile cryptocurrencies, like Bitcoin, haven’t been. The project is the culmination of a year-long effort as Facebook seeks to spur growth on its various platforms that already count more than 2 billion users. But it will also likely face skepticism–from regulators who already think Facebook has too much power and plays loose with digital privacy, and from those that are dubious of cryptocurrencies, which are known more for speculative investments and blackmarket commerce than for legitimate financial transactions.Read Facebook's white paper on Project Libra here.If successful, Libra could make Facebook a much bigger player in financial services. Cryptocurrency firms have been trying to build cross-border, digital currencies on the blockchain to disrupt traditional banking and payments for a decade, but nothing has caught on at the scale of traditional money yet.Facebook, which announced the project with 27 partners, is already under wide-ranging regulatory scrutiny over how it handles users’ private data. Growth of its main platform has plateaued in some major markets and crypto payments would be a way to turn messaging – across WhatsApp, Facebook and Instagram -- into a business that complements its advertising operation, which generates almost all of its revenue. Facebook shares gained early Tuesday as analysts saw the move as a potentially major new profit stream. “We view Facebook’s introduction of the Libra currency as a potential watershed moment for the company and global adoption of crypto,” wrote Mark Mahaney, an analyst at RBC Capital Markets who has an outperform rating and $250 price target on Facebook shares. “In terms of scale and importance, we believe this new financial infrastructure could be viewed similar to Apple’s introduction of iOS to developers over a decade ago.”Still, the announcement was met immediately with political opposition in Europe, with calls for tighter regulation of the company. French Finance Minister Bruno Le Maire said Libra shouldn’t be seen as a replacement for traditional currencies and called on the Group of Seven central bank governors to prepare a report on the project for their July meeting.“It is out of question’’ that Libra “become a sovereign currency,’’ Le Maire said in an interview on Europe 1 radio. “It can’t and it must not happen.”Read More: Facebook’s Cryptocurrency Project: Who’s In and Who’s OutFacebook Could Be for Crypto What AOL Was for Internet Adoption Crypto Chiefs Novogratz, Allaire Say Facebook Coin Bullish SignFacebook Rallies as Analysts Praise 'Watershed' Crypto Move France Calls for Central Bank Review of Facebook CryptocurrencyTo come anywhere close to matching the U.S. dollar for utility and acceptance, Libra will need to be widely trusted. So Facebook and its partners are mimicking how other currencies have been introduced in the past.“To help instill trust in a new currency and gain widespread adoption during its infancy, it was guaranteed that a country’s notes could be traded in for real assets, such as gold,” the companies wrote in a white paper. “Instead of backing Libra with gold, though, it will be backed by a collection of low-volatility assets, such as bank deposits and short-term government securities in currencies from stable and reputable central banks."The total number of Libra can change, and new digital coins can be issued whenever someone wants to exchange their Libra for an existing fiat currency, so the price shouldn’t fluctuate any more than other stable currencies, according to David Marcus, head of the Facebook blockchain team that’s spearheading the project.“It would make a scenario where there’s a run on the bank completely impossible, because we are backed one-for-one,” he said. Libra will also be audited, he added, an important step in an industry with limited transparency.Facebook has closely guarded its crypto plans for more than a year, though many of the details have already been reported by Bloomberg News and other outlets.Read about how Marcus tapped PayPal talent to build Facebook’s blockchain team.Marcus, who used to run Facebook Messenger, said Facebook plans to build a new digital wallet that will exist inside Messenger and its other standalone messaging service, WhatsApp. Once Libra is up and running, the currency and the digital wallet should make it easier for people to send money to friends, family and businesses through the apps. Libra will run on the so-called blockchain, a database that can use millions of computers to verify transactions, eliminating risks that come with information being held centrally by a single entity. Facebook created a new subsidiary, called Calibra, to build the new wallet and focus on the company’s blockchain efforts.Facebook's track record in payments and commerce has been spotty. A few years ago, it began letting people buy flowers or hail an Uber through its Messenger service. Those features have not been huge hits. In 2010, it began offering Facebook Credits, a way to buy virtual goods inside Facebook games. But in 2012 it scrapped Credits, and in 2013 it started working with third-party services like PayPal to process some payments. Facebook's revenue from "payments and other service" was less than 2% of total sales in 2018. When it finally arrives, Libra will be late to a party that’s been going on so long, many of the party-goers have either left or collapsed. Some past attempts to make coins usable for commerce, such as Bitcoin, haven’t widely caught on yet because price volatility mainly attracted traders and speculators. Predecessor stablecoins, like Tether, have been used by some traders to park funds in during times of high volatility, but have not been broadly adopted for commerce.Read more about Facebook CEO Mark Zuckerberg’s early plans for cryptocurrency. U.S. regulations may represent another hurdle for Facebook. Creating a digital currency doesn’t just require buy-in from financial institutions who need to accept it, and consumers who need to trust it, but it requires approval from regulators, too. The Securities and Exchange Commission has shut down about a dozen businesses issuing their own tokens for violations of securities law. Marcus said Facebook has been in contact with regulators and central banks, but added that the company hasn’t received a “no-action” letter from the SEC yet. That would have safeguarded the project from regulatory action by the agency.One way Facebook hopes to appease regulators is through the Libra Association, a governing body tasked with making decisions about Libra. Firms including Visa and PayPal Holdings Inc. are part of the group. Marcus described these members as “co-founders,” and said they will have an equal say in how the cryptocurrency is managed.“Facebook will not have any special privilege or special voting rights at the association level,” said Marcus, the former president of PayPal. “We will have competitors and other players on top of this platform that will build competing wallets and services.”All Libra Association members are putting a minimum of $10 million into a reserve to help support the cryptocurrency’s value. This buy-in comes with voting privileges. However, the association’s governance structure is still in flux, and most of the group’s crucial decisions, including the creation of its charter, have not yet been decided, according to several members of the group. They asked not to be identified discussing private details.“Facebook will not have any special privilege”Libra’s timing could also pose challenges. Facebook is being investigated by the Federal Trade Commission over the company’s privacy practices. Some have called for the company to be broken up, including Senator Elizabeth Warren and Facebook co-founder Chris Hughes. Asking consumers to put more trust in the social media giant, and giving Facebook a strong entry into the world of digital payments and banking, will likely draw further criticism.Opinion: Crypto-evangelists hoped digital currencies would challenge Big Tech’s data control. Zuckerberg has other plans.The company plans to keep financial data gathered from Libra users separate from Facebook user data. That’s why Facebook’s digital wallet will exist under the Calibra subsidiary, which will house user transaction data on separate servers, Marcus said. If a WhatsApp user uses her Calibra wallet to send money to a friend or pay a retailer, those interactions won’t be stored alongside her social-media profile.“There’s a clear distinction between Calibra and what Calibra has access to, and what Facebook Inc. has access to,” Marcus said. “It’s very clear that people don’t want their financial data from an account to be comingled with social data or to be used for other purposes.”(Updates with analyst comment, French finance minister, and shares.)\--With assistance from Jennifer Surane.To contact the authors of this story: Kurt Wagner in San Francisco at firstname.lastname@example.orgOlga Kharif in Portland at email@example.comJulie Verhage in New York at firstname.lastname@example.orgTo contact the editor responsible for this story: Alistair Barr at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Visa (NYSE:V) is up more than 25% over the past year, stoked in part by Federal Reserve rate hikes of 2018 that have translated into higher profit margins for credit card companies. The overall fundamental strength of the company has also been the catalyst behind the Visa stock returns.Source: Kārlis Dambrāns via FlickrThe world's largest retail electronic payments network, Visa, is expected to report earnings in late July. There could be some volatility and profit-taking in Visa in the coming weeks, especially as many other financial services firms also report in July.However, I'd encourage long-term investors who would like exposure to the sector to regard any dip in the share price as an opportunity to add Visa stock to their portfolio.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Top-Rated Biotech Stocks to Invest In Today Long-Term Visa Stock StrengthsRobust Fundamental Numbers: Visa is a quality blue-chip company with a $370 billion market cap. Since going public in 2008, Visa has rewarded shareholders continuously.The group does not issue credit cards or lend money. Instead, the company operates as an "intermediary," charging a fee on each of the 150 million transactions its network handles every day.Visa has three sources of revenue: * Service revenues (for services provided to card issuers for the use of Visa products); * Data processing revenues (fees Visa collects for the authorization, settlement, or clearing); and * International transaction revenues (for cross-border and currency conversion transactions).On April 24, Visa posted better than expected results for Q2 2019. Revenue for the quarter ending March 31 was $5.5 billion, an 8% growth year-over-year (YoY).Earnings per share (EPS) also increased to $1.31, a 17% YoY increase. As a result of robust growth in payments volume, cross-border volume and processed transactions, the company also increased its outlook for the year.As one of the major credit and debit card processors, Visa has strong pricing power and a good profit margin that stands at over 54%. Visa's leadership position in the industry requires financial flexibility so that the management can continue the growth-centric steps. Its current ratio, which measures Visa's ability to pay off short-term liabilities with its current assets, is a healthy 1.6, compared to the industry average of 2.4.In fact, Visa and its long-time archrival Mastercard (NYSE:MA) can be said to have a duopoly in the cards network sector. Both companies collect transaction fees for without bearing credit risk and control a majority of the digital payment infrastructure. And there does not seem to be much threat to the dominance of either company.Visa's sales numbers are forecast to grow over 10% in 2019 and 2020. Overall, Wall Street expects Visa's profitability, high margins, robust cash flow and healthy financial metrics to continue in the coming quarters, too -- a fact that should bring higher prices for V stock.Mobile Payments Space: Many of us have already paid for a purchase with our smartphones at least once as mobile payments are fast becoming a convenient and swift method to pay bills or make transfers. Analysts expect the global market to reach $4.5 trillion by 2023.The most widely used transaction methods include contactless payments without entering the credit card PIN number at the point-of-sale or using a smartphone to pay a merchant or even a person such as a friend or family member, i.e., peer-to-peer (P2P) payments.If you are looking at ways to benefit from this trend, Visa may be a solid company to consider. It's been boosting its mobile payment offerings. As early as 2011, the group took a stake in Square (NYSE:SQ), the San Francisco-based credit card processing fintech, which was founded in 2009. There are rumors that Visa may end up acquiring Square.Its other strategic investments include Stripe and Marqeta as well as It's currently bidding to buy Earthport,a British payments company, that facilitates money transfer services across borders.Over the past decade, smartphones have become a part of our daily lives and it would not be wrong to expect mobile payments to enter our daily lives in a big way. In other words, as more consumers tap to pay or download an app to transfer money, Visa investors are likely to reap the rewards. What Could Derail Visa Stock?Short-term Technical Analysis and Price Charts: Year-to-date, Visa is up 28%. So, in the next few weeks, there might be some profit taking. As a result of the recent impressive run-up in the stock price, short-term technical indicators have become somewhat over-extended. Investors who pay attention to short-term oscillators should note that Visa's technical message has also become "overbought."Leading up to its earnings report in late July, Visa stock could trade sideways for several weeks and even have a pullback toward the low-$160's or even mid-$150's level, where the stock is likely to find major support.Visa stock's beta is 0.98, which means its volatility on average mimics that of the broader market. Therefore if the industry or the broader market declines as the companies release earnings, Visa may also be adversely affected.Investors may consider waiting on the sidelines if they do not currently have any positions open in these tech stocks.If you already own Visa shares, you might want to hold your position. That said, if you are worried about short-term profit taking, then within the parameters of your portfolio allocation and risk/return profile, you may consider placing a stop loss at about 3-5% below the current price point, to protect your profits to date.Current shareholders may also consider hedging their positions. As for hedging strategies, covered calls or put spreads with July 19 expiry could be appropriate as straight put purchases are likely to be expensive due to heightened volatility.I would not advocate bottom-picking in case of near-term price weakness. Yet, I find Visa stock to be a compelling buy candidate and by the end of 2020, I'd expect the shares to reach $180.Competition in the Mobile Payment Payments Space: The fintech revolution is evolving and the entire payments industry is growing fast. In addition to Visa, several other U.S. companies are leading the mobile-payment race that requires cutting-edge technology. In October 2014, Apple (NASDAQ:AAPL) introduced Apple Pay which has now become one of the dominant digital payment apps in the U.S.In the P2P space, investors love PayPal (NASDAQ:PYPL) which owns the popular Venmo app. The app has over 25 million users and is ahead of its closest competitors -- Apple's Pay Cash, Square's Cash App, and Zelle, which is owned by Early Warning Services, a private fintech company.If there are mixed earnings reports or important news from Visa's competitors hit the wires, there may be short-term volatility or decline in the stock. For example, if any of Visa peers were to issue an earnings warning, due to a potential slowdown in consumer spending in the U.S. or globally, then Visa shares could also be adversely affected in the near-term.However, Visa is a solid company with continued growth prospects in mobile payments. Therefore small price dips on daily headlines should not keep long-term investors up at night.In general, whenever Visa stock price has a correction, such as the one it experienced in late 2018, the shares come back rather quickly, only to make a new high in several months. Bottom Line on Visa StockVisa stock is a fundamentally sound stalwart investment with further growth prospects, profitability, leadership in the respective market, stability, and proactive management -- factors that are likely to translate into a strong balance sheet and robust bottom line in the rest of the decade.There are two important secular trends currently affecting the payments sector in the U.S. as well as many other countries, i.e., payment transactions are increasingly moving to mobile and digital payments are surpassing cash payments. As the industry is growing and being transformed, Visa stock may indeed provide a solid long-term investment for many shareholders.Investors who are interested in financial services, but do not want to commit all their capital to a single stock such as Visa may also consider investing in various exchange-traded Funds (ETFs) that have Visa as a holding, including iShares U.S. Financial Services ETF (NYSEARCA:IYG), ISE Mobile Payments ETF (NYSEARCA:IPAY), or Vanguard Information Technology ETF (NYSEARCA:VGT).As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 7 Best Tech Stocks to Buy for the Second Half of 2019 * 7 Top-Rated Biotech Stocks to Invest In Today * 4 Semiconductor Stocks to Sell Compare Brokers The post There Are Really No Good Reasons to Keep Laying off Visa Stock appeared first on InvestorPlace.
(Bloomberg Opinion) -- Facebook Inc.’s planned cryptocurrency is going to need more friends to work.On Tuesday, the social media giant announced it had signed up 27 partners to develop and administer Libra, a digital medium of exchange for use on its apps and beyond. Uber Technologies Inc., Spotify Inc., Visa Inc. and Mastercard Inc. are all taking part – but there’s a notable absence of banks, large retailers and consumer goods companies, whose massive marketing budgets are the staple of ad agencies worldwide.This matters because Facebook is, above all else, an advertising platform. Chief Executive Officer Mark Zuckerberg has to prove that Libra will deliver more value to brands than their current advertising setup. Judging by this initial list of partners, a lot of firms appear unconvinced. The company wants to sign up a total of 100 by the time the coin starts next year. It will need every one of them, and more.For Zuckerberg, the best possible outcome is that the coin, which is tied to a basket of foreign currencies, keeps both users and brands locked into the Menlo Park, California-based firm’s ecosystem.In theory, a user might receive a token for watching an ad, which they then spend on something they have also seen advertised on Facebook. The company selling the product could then use that token to buy more ad space on the social network, and so the cycle would start anew. That would mean that, even if Zuckerberg had to spend a little bit more to keep his users engaged, the money would ultimately flow back into his company’s coffers.For brands, the big question is just how much data from that process will Facebook be willing to share? You can see why companies might be wary about signing up on day one. Facebook and its family of apps – Instagram, WhatsApp and Messenger – are already something of a walled garden when it comes to advertisers. They regularly complain that they have little visibility over what they call the journey of their customers: What ads did customers see before making a purchase or clicking through to a website? That anonymized data allows them to gauge whether an approach works or not.Many purchases happen on brands’ own websites right now, which is a problem for Facebook, since it doesn’t know itself when a user has decided to buy something. Knowing what exactly prompts a purchase would help the company target future ad campaigns more effectively. Starting its own digital wallet – Calibra – should allow it to plug that gap by inserting itself into the middle of consumers’ transactions. Facebook has said that it won’t use financial data to target ads, but the wallet will nonetheless surely be optimized to execute purchases from within one of its platforms.The model here is Amazon.com Inc. The e-commerce giant knows almost every stage of an online shopper’s journey to purchasing an item, allowing it to target them with precision. That’s a threat to both Facebook and Google’s advertising models, and goes a long way to explaining why Zuckerberg is so keen to make friends. To contact the author of this story: Alex Webb at firstname.lastname@example.orgTo contact the editor responsible for this story: Edward Evans at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
SINGAPORE, June 18, 2019 /PRNewswire/ -- Visa Inc. (NYSE:V) today announced new analysis showing Visa Advanced Authorization (VAA) using artificial intelligence (AI) helped financial institutions prevent an estimated $25 billion in annual fraud making the global payment ecosystem safer for retailers and consumers.[i] VAA is a comprehensive risk management tool that monitors and evaluates transaction authorizations on the Visa global payment network, VisaNet, in real time to help financial institutions promptly identify and respond to emerging fraud patterns and trends. Visa processed more than 127 billion transactions between merchants and financial institutions on VisaNet last year, and employed AI to analyze 100 percent of the transactions - each in about one millisecond - so financial institutions can approve legitimate purchases while quickly identifying and preventing fraudulent transactions.
CNBC's Jim Cramer said Monday that Facebook, Inc. (NASDAQ: FB )'s reported plans for a cryptocurrency are a reason for investors to back the social media stock . If the coin launch goes ahead as expected ...
Visa (NYSE:V) today announced global adoption of its sensory branding suite in 25 countries via more than a dozen new partnerships. The suite is comprised of sound, animation and haptic brand cues that occur with a Visa payment transaction. In a digital world increasingly filled with voice-commands, networked appliances and unattended retail environments, Visa’s sensory branding cues offer new ways to enhance the customer experience and convey the trust and security that the Visa brand represents.