Fintech

Forget 'Zuck Bucks.' The real story is Facebook’s financial identity crisis.

Meta’s money business has been called Facebook Payments, Facebook Financial and Novi. It’s settled on Meta Financial Technologies. For now.

Forget 'Zuck Bucks.' The real story is Facebook’s financial identity crisis.

There's massive upheaval in the division that houses Facebook Pay and other financial products.

Image: Unsplash; Protocol

Meta has ditched a short-lived name for its financial division, Novi, in favor of Meta Financial Technologies. It’s just the latest, most visible indicator of the massive upheaval in the division that houses Facebook Pay and other financial products.

Novi was a high-profile bet for Meta. It was originally the name of Facebook’s crypto wallet, a project championed by executive David Marcus, but grew to become the name for the group he oversaw. When the company changed its name to Meta Platforms Inc., Marcus announced that his unit would change its name from Facebook Financial, or F2, to Novi.

But Novi was a strategic failure, dogged by regulatory challenges and global government scrutiny. Marcus abruptly left weeks after announcing the name change. His successor, Stephane Kasriel, quietly revealed the new name on Twitter in March.

Kasriel has also been updating the division’s strategy in what appears to be a major reversal of Marcus’ crypto push. The Financial Times recently reported that employees were calling a non-crypto virtual currency “Zuck Bucks” — a name used a decade ago to describe Facebook Credits, a digital currency used for then-popular games played on top of Facebook’s desktop website.

Such a system would be a throwback to Facebook’s earliest payments efforts. Relying on stored-value accounts similar to PayPal, user wallets holding credits would largely fall under money-transmitter regulations. And Meta has had a corporate infrastructure for conventional payments for over a decade.

Marcus and Kasriel were both intimately familiar with those systems. Marcus founded and Kasriel was an executive at a startup called Zong, which processed mobile payments for purchases of Facebook Credits. Marcus sold that company to PayPal, where he was president before he joined Facebook.

A stored-value system using conventional money would also mean avoiding the regulatory woes that doomed the Novi wallet and its associated crypto stablecoin, Diem. In contentious hearings about Facebook’s cryptocurrency plans, some members of Congress referred to Diem and its predecessor Libra as “Zuck Bucks,” which strongly suggests that the moniker won’t make it off campus.

A Meta job listing for a security engineer doesn’t even mention Novi, instead describing work on an “MFT digital wallet.” A job listing for a data scientist likewise omits mention of Novi. Stephen Rocco Rodi, a Meta spokesperson, said the security engineer job listing was a “mistake” and would be updated to include the Novi name. He added that the Novi wallet remains in a pilot test.

Most of Meta’s recent registrations and licenses were made through its Novi Financial Inc. subsidiary. It remains registered in California as a money transmitter under the Facebook Payments Inc. name, and it has registrations as Facebook Payments International and Facebook Payments Europe for international payments.

One area where Meta could make a big push is in ecommerce payments for purchases on Instagram, Facebook Marketplace and possibly new metaverse environments. One job listing for an MFT strategic merchant manager describes the position’s duties as reducing “barriers that prevent people from driving payments and commerce on Meta.” But Meta faces significant competitors there, including PayPal and Shopify. Many merchants have been reluctant to embrace crypto payments, and the Novi name’s associations with crypto may have proved a drag on Meta’s efforts in ecommerce.

The name did not come cheap, in yet another sign of the importance Meta placed on it. Besides the ongoing expense of removing references to Novi, Meta paid the parent of MetaBank, Meta Financial Group, $60 million last year for Meta-related trademarks. The bank, which is an important partner to many fintech companies, renamed itself Pathward last month.

The abruptness of the change may explain why, a month after Kasriel tweeted it into existence, Meta Financial Technologies has barely any footprint on Meta’s corporate websites. Among other openings, the company is hiring an internal communications manager. That person will work on “building morale, articulating organization and company-wide strategy, building confidence and trust in leadership, and rallying employees around the organization’s ambitious goals.” It will also require someone “comfortable working in ambiguity.”

Fintech

Gavin Newsom shows crypto some California love

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Photo: Jerod Harris/Getty Images for Vox Media

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Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

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