The Facebook outage caused inconvenience to millions, irritation to many and glee to its critics. There may be other, far-reaching consequences.
Facebook and its stable of social media platforms have long been trying to enter the financial realm, knowing that finance is where the motherlode sits. So far, that goal has been tantalisingly out of reach.
For several years now, Facebook has been trying to put together a stablecoin play called the Libra Association. We, and many others, had some fun poking at its weaknesses, picking at its flaws and were, we admit, smiling slightly when Mastercard, Visa and others pulled out of the project, which was swiftly renamed, Diem.
And then all went quiet.
Facebook has other financial plans, as do other big tech companies. Facebook Pay is the latest, and the company has now created an umbrella division to oversee all its payments and financial projects.
The Facebook outage will only increase users’ nervousness about using Facebook for financial transactions. Already, big tech companies are quite a way down the list of institutions people would trust with their money. Now they will be further down.
The company is already up against the regulator, and the Facebook outage will not sit easily when it comes to weighing up whether the company should be allowed to handle sensitive financial transactions and data. Top of the list of questions will surely be ‘how come you only seem to have one system to handle your billions of users?’
The next few years will see massive changes in the freedoms enjoyed by companies that run our digital world. The Wild West is coming under Government supervision, and the outlaws and cowboys will be run down or squeezed into suits and sent to real offices.
The Facebook outage was some weeks ago now. However, the ramifications of that bizarre event and the timing of the revelations of whistleblower Frances Haugen will still be playing out in the months ahead. It also doesn’t help that Andreessen Horowitz has just poached two of its most senior and influential payments and security executives.
Whether the Facebook outage stops the company’s financial aspirations remains to be seen, but you can’t help feeling that, for Facebook, the gold mine that is the financial world will remain just out of reach.