British telecoms giant Vodafone has left Facebook’s Libra Association to focus on expanding its own payments system called M-Pesa, which is currently used in six African nations.
Confirmed by both Vodafone and Libra in a statement on January 21, a Vodafone spokesperson said that the company remains committed to making a “genuine contribution” to the promotion of worldwide financial inclusion.
Libra’s head of policy and communication Dante Disparte said that while the members of the Libra Association may change over time, Libra’s technology and mission will ensure it “stays resilient”.
Vodafone was quick to point out that it isn’t moving away from the project because of regulatory concerns, but rather because of a desire to focus on its own payment solution called M-Pesa.
M-Pesa is the largest mobile money service in Africa, providing access to money transfer services using just a mobile phone.
The service, which has been active for 12 years, has 37 million users across Africa who made a huge 11 billion transactions during 2019.
The success of M-Pesa during 2019 may have led Vodafone to question the need to pursue Libra payment solutions.
Bailing out of a sinking ship?
It’s no secret that Facebook’s Libra project has faced immense difficulties even before any firm launch date has been decided, mainly due to regulatory pressures and trust issues.
Libra hit back at PayPal’s decision, saying at the time:
“Commitment to [our] mission is more important to us than anything else. We’re better off knowing about this lack of commitment now.”
But since then, Visa, Mastercard, Stripe, Mercado Pago, and eBay have all backed away from the Libra Association, with many citing regulatory roadblocks as a key concern.
The mass exodus of companies away from Libra has prompted speculation that the firms are exiting a sinking ship.
Last month, Swiss president Ueli Maurer described Libra as a failure, saying it would never work in its current form.
Facebook officials have said that Libra’s planned launch in 2020 is now uncertain and largely depends on regulatory approval on a case-by-case basis in each jurisdiction.
You can read more about Facebook’s Libra here.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.