Meta embeds Novi into WhatsApp to take advantage of US P2P payments and growing crypto adoption

• Meta is enabling P2P payments within WhatsApp through its digital wallet app, Novi. 
• The desire for easier and more affordable money transfer services could help Meta attract users and rake in payments volume.
• Insider Intelligence publishes hundreds of insights, charts, and forecasts on the Payments & Commerce industry. Learn more about becoming a client.

The news: Stephane Kasriel, head of Meta-owned digital wallet and fintech unit Novi, tweeted that a limited number of US-based WhatsApp users can now send and receive money using Novi. Novi—which uses the stablecoin Pax Dollar (USDP)—began testing transfers between the US and Guatemala in October. The feature will let users access Novi and initiate transfers directly within WhatsApp.

Key context: Developers first speculated about a Novi-WhatsApp link in early November when they discovered code in a WhatsApp beta version that pointed to a potential peer-to-peer (P2P) payments offering in the US. At the time, we predicted that this could mean Meta plans to bring all its payments offerings under the Novi brand amid a push to bolster payments revenues.

Novi was intended to launch with Meta-backed digital currency Diem (formerly known as Libra), but regulatory and technical missteps with the project likely led the unit to use USDP instead. However, former Novi head David Marcus said Meta still intends to launch Novi with Diem after the digital currency receives regulatory approval.

The opportunity: Novi’s integration with WhatsApp can help Meta make inroads in US peer-to-peer (P2P) payments and cryptos.

• US P2P payments are expected to near $1 trillion in transaction volume next year, according to Insider Intelligence forecasts. Meta can take advantage of WhatsApp’s vast US user base—which we forecast will hit 63.8 million in 2022—to tap into the growing market. The desire for easier and more affordable money transfer services could help Meta attract users and rake in payments volume.
• Cryptos are quickly gaining traction: A Mastercard report from earlier in the year found that 40% of global consumers planned to use cryptos in 2021. And the bevy of crypto-linked cards that launched this year could further indicate an appetite for crypto payments. Meta could use its WhatsApp service to capitalize on the crypto frenzy and help drive Diem adoption once it launches.

The bigger picture: The US is plodding toward crypto-specific regulations: Most recently, executives from major crypto exchanges appeared before Congress to promote the opportunities that digital currencies can offer. Proper regulation can make crypto payments safer and more viable for consumers and could help spur growth for solutions like Novi.

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