PayPal indeed turns its back on Libra project

PayPal is indeed exiting Facebook’s Libra project. The payment processor doesn’t really provide a clear explanation for the move, but Financial Times sources said on Friday that PayPal is concerned about its money laundering capabilities and overall resistance to Libra.

PayPal says in a response to Engadget, among others, that it currently chooses to “continue to focus on making payment services accessible to underserved populations”. The source of The Financial Times also stated that PayPal may still participate in the Libra project at a later date.

The report from The Financial Times also stated that Mastercard and Visa had reservations about Libra. However, unlike PayPal, they were present at an important meeting about Libra last Thursday and to date, the two parties have not yet thrown in the towel. France and the ECB have already been highly critical of Libra.

In a series of tweets the Libra project does respond to the news, but little substantive is reported there either. It is recognized that the road to a new mainstream payment system is ‘not easy’ and that each company must make ‘its own assessment’ with regard to risk analysis. Libra does say it will soon reveal details about the “1500 entities” that “have a strong interest in participating.”

Facebook announced Libra in June. Officially, a non-profit organization based in Switzerland is responsible for the payment method, but the initiative lies with Facebook, which wants to use the payment method on its platform. Other parties that pledged support for the announcement include eBay, Spotify, Uber, Lyft and Vodafone.