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Facebook Admits 'Trust Deficit' As It Looks To Launch Digital Wallet (axios.com) 61

Posted by msmash from the up-next dept.
Facebook says it's finally ready to launch its most ambitious new product in years: a digital wallet called Novi. But the man leading the charge says Washington could stand in its way. From a report: Facebook needs to convince regulators skeptical of its power that it's a good idea. "If there's one thing we need, it's the benefit of the doubt," Facebook's David Marcus said in an interview with Axios. "[W]e're starting with a trust deficit that we need to compensate." Much of Facebook's broader ambitions, like building a "meta-verse" and advancing its shopping platform, are tied to innovations in payments.

Marcus -- head of F2, which stands for Facebook Financial -- visited Washington last week to meet with key regulatory stakeholders about Novi, a wallet app built on blockchain technology. Crypto-based payment systems, he says, will help to "really lower the bar for accessibility to a modern financial system." He was also there to discuss the Diem Association, a group made up of 26 corporate and non-profit members that is building a blockchain-based payments system that Novi will use.

The group is meant to act as an unbiased third party that allows various digital wallets around the world to trade using the same type of digital coin, called a Diem. Marcus says Facebook is hoping to launch Novi in conjunction with Diem by years' end. While Novi is ready to launch now, it's unclear whether Diem will be ready this year, in part because it requires more regulatory buy-in. Regardless, "we plan to actually get it out (Novi) in the market this half, no matter what," he said.
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Facebook Admits 'Trust Deficit' As It Looks To Launch Digital Wallet More

Facebook Admits 'Trust Deficit' As It Looks To Launch Digital Wallet

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  • Just a couple days after it made news for classifying Black people as primates? Seems like they need to work on their messaging strategy.

    • Re: (Score:3)

      by Moryath ( 553296 )
      Given the number of times I've reported posts that included vulgar bigotry and obvious hate speech (n-word, "slant-eyed chink", homophobic slurs, anti-trans slurs, etc) and Facebook ruled "not a violation" despite all of that being specifically disallowed in their so-called "Community Standards", I'd say Facebook's "trust level" is somewhere in the neighborhood between Jack and Shit.

      • About three or four of my Facebook friends have posted before about finally being "let out of Facbook jail." I don't see that much of what they post, but given what I do see, it must have been pretty egregious to get them punished.

        • Re: (Score:2)

          by Moryath ( 553296 )

          If you stand up to alt-right bullies on Facebook, they will brigade-report you. It happens quite often. Even if you say something as simple as "don't be a bigot", they'll have 1000 trolls from one of the *Chan boards or a troll site like KiwiFarms start filing reports, hoping that one will eventually slip by and be ruled a "violation."

          There's also the major problem that Facebook's moderators are generally a combination of (a) excessively misogynistic Indian males working in what used to be tech-support ca

        • When they did it to me, I took it as rehab clinic and a withdrawal therapy. Used the EU laws to download all my data, and to actually nuke the account. Never went back. Happier for it.

          Frankly, friends don't let friends use Facebook. They report them so they get blocked and can free themselves. ;)

          Please tell they have a problem, and need to address their Stockholm syndrome. You know what to do if they aren't able to do it on their own.

        • An accidental tit flashing is considered to be worse than offensive word insults.

      • Not just that, but ads for counterfeit merchandise, blatant phishing activity, doxxing, and all kinds of other stuff. Facebook refuses to address any of it, and doesn't even have the integrity to admit there's a problem. Trust? Not in my lifetime.

    • Re: (Score:2)

      by adrn01 ( 103810 )
      I'd no more trust my banking to Facebook than I'd trust a jackhammer operator to perform a circumcision.

    • Saying "Facebook has a trust deficit" seems a lot like saying "Biden is not quite Mensa material".

    • We don't know who they were calling primates, it could have been the white people in those videos, since it was the white people who were acting like primates.
  • LOLOLOLMFAOLOLOLOLOL.. Of course. Trust. I think facebook can be trusted with our financial data to the same degree it can be trusted with our other data.

    • Which means not at all.

      When you see that they have trackers everywhere even under obscure domain names you know that they know too much.

      I suspect that they have enough data on 90% of their users to perform id theft in gigantic numbers.

      • I think you misunderstand how trackers work. Anyone with a website (or even just a page) can add a Facebook Pixel to it by inserting some code. In exchange, you get to spam people hitting that Facebook Pixel. And Facebook gets data. All because you weren't blocking social trackers with the Disconnect extension.

  • Too many already (Score:4, Interesting)

    by RitchCraft ( 6454710 ) on Tuesday September 07, 2021 @06:11PM (#61773397)
    "If there's one thing we need, it's the benefit of the doubt" ... Nope, nope, nope - too many of those use up already

    • Re: (Score:3)

      by cusco ( 717999 )

      Not just "no", but "No fucking way in hell NO!"

    • "If there's one thing we need, it's the benefit of the doubt" ... Nope, nope, nope - too many of those use up already

      I would argue that they are getting the full benefit of the doubt in this specific instance. Everybody and his dog heartily doubts that Facebook can be trusted to run even a lemonade stand with anything approaching integrity, much less a social media site; so they are "benefiting" from the doubt they have created by now having the opportunity to prove themselves trustworthy. Come talk to us in a decade Facebook, after you've ditched the Zuck and demonstrated a track record of policies and actions that benef

  • Facebook Jail = Lose Access to Digital Wallet (Score:5, Insightful)

    by Vandil X ( 636030 ) on Tuesday September 07, 2021 @06:15PM (#61773407)
    And if Facebook decides they don't like something you say or post, they can put you in Facebook Jail AND lock you out of your Digital Wallet.

    But let me guess, their fact checkers say that's false.

    • Re: (Score:2)

      by evanh ( 627108 )

      Good idea! Throw all the users in there then close up shop. The place is only for losers anyway.

      • And on this zombie site here, what are we?

        • We're the land of broken toys. The people too dumb to stay away from all social media, but just smart enough to not go to the well known data siphon social media sites. We like to think we're extra special stand outs, but really we're just nerds that are stuck in a semi-introverted state and looking for those like us to exchange pleasantries and angry rants from time to time. Human needs in broken bodies and twisted minds.

    • This comment will go to +5. Then in about a day it will go down to maximum +3 maybe lower. There is a zombie account army that is timing and manipulating this (ancient) website. Can't fight the truth, though. Internet points are meaningless. You're 100% on the money regardless of what ShareBlue or whatever it may be called now manipulates your karma to say in the next few days.
    • This. I barely trust FB with the data I do give them. No fucking way am I trusting them with anything to do with finances.
  • Better trust deficts than intellect deficts and balance deficits and privacy deficits...

  • Unfortunately, I think they'll succeed (Score:4, Insightful)

    by 93 Escort Wagon ( 326346 ) on Tuesday September 07, 2021 @06:27PM (#61773447)

    I'm betting Facebook Wallet quickly becomes a financial power. Not with us, obviously. And likely not with any of the family members who ask us for advice... at least not for a while. But the people I work with (outside of my group), and people I know casually - it's rare for any of them to display any sort of healthy distrust of Facebook. They might go as far as saying "I know I should be more careful", but then they turn around and keep posting more details about their kids, their vacation plans, their jobs, their personal health... they're going to lap this new offering up.

  • "If there's one thing we need, it's the benefit of the doubt,"

    In the US financial services industry regulators specifically deny the industry the 'benefit of the doubt'. It's the industry, be it a bank, credit card issuer, transaction services provider, lender, or those who provide any services associated, none get the benefit of the doubt. None.

    Facebook should be treated as merely another erstwhile, aspiring financial services provider. And expected to prove their trustworthiness, document compliance with

    • Facebook would be fine with being treated just like Wells Fargo and Deutsche Bank (and, no doubt many others).
      There is a lot of money to be made stealing money from poor people and laundering money for criminals, and the consequences when the regulators catch you are, well, not much.

  • Funny way to spell "Absence" (Score:4, Insightful)

    by nicolaiplum ( 169077 ) on Tuesday September 07, 2021 @06:43PM (#61773497)

    That's a funny way to spell "absence" after "trust" there.

    No-one trusts Facebook. Not regulators, not advertisers (the actual customers of facebook), not users, not politicians, not banks, no-one.

    They're a busted trust flush. A trust emperor with no clothes on. A trust sandwich with no bread and no filling either. Their bucket of trust not only has a hole, it is actually a colander. The trust anyone had in Facebook has shuffled off this mortal coil and joined the choir invisible. IT IS DEAD.

    • Alas, I'm afraid you're vastly overestimating the skull contents of our average species-mate.

  • "Trust Deficit" (Score:3)

    by richardtallent ( 309050 ) on Tuesday September 07, 2021 @06:44PM (#61773499) Homepage

    "I promise, Charlie Brown, I won't move the ball! You just have a trust deficit with me."

  • deficit - the amount by which something, especially a sum of money, is too small.

    They're not suffering a trust deficit, their trust bubble burst long ago and, because they learned bupkis about why their trust bubble burst, they haven't done anything to reverse and gain trust back.

    • They realize what happened just fine. Its just that their entire business model is based on them knowing your bank account number, your friends secrets, your sexual preferences, and when your last bowel movement was. And selling all that info to literally anyone with a checkbook. Their core business model is entirely incompatible with a trust relationship and they know it. The tech companies I have a limited level of trust for are Apple, Amazon, Microsoft. They sell me stuff, I pay for it, they provide it,

  • Practicalities of the Con (Score:5, Informative)

    by ytene ( 4376651 ) on Tuesday September 07, 2021 @06:53PM (#61773541)
    When thinking about the introduction of Diem, it's worth remembering both the previous history and the limitations of the offering.

    When originally announced, Diem was going to be a multinational solution - it looked from the earliest announcements that Facebook wanted to set up a "private currency" that users could employ to get different global services and which - or so it looked - possibly given them access to the lucrative "currency spread" - the profit margin that the big banks cream off when converting between different currencies.

    That dream hit all sorts of regulatory issues - I don't think it's entirely unfair to say that institutions like the EU basically laughed - and as a result Facebook basically retreated and now peg the "Diem" to the US Dollar. Simpler, less to worry about from a regulatory point of view. Easier to get "up and running".

    But hang on a minute.

    If it looks like a dollar, walks like a dollar and quacks like a dollar, why not just use a dollar? The answer is simple. Think of Diem just like any "credit" that you might have on platforms like the Sony Playstation Store, which might be the case if you fund your purchases their using Playstation Vouchers. You might do that in preference to giving your credit card details to Sony - a wise move given that they've been hacked before... But here's the problem with PSN Vouchers... You want a game that costs $39.99. You buy a $50 Playstation Store voucher, add the credit to your account, get your game and you're happy, right? Yes. But so are Sony, because you just left $10.01 on your account in credit.

    Where do you think that $10.01 goes?

    Answer: in to Sony's bank account. Oh sure, it's "yours" inasmuch as it is linked to your account and you're free to spend it on future purchases. But once you put it "in" the Store, you can't get it out again. You can only spend it.

    And there is the secret to Diem and there is the reason that Diem is a con. It's designed to "hold" your money in "Diem form", which means that it will be sitting in Facebook's bank account until you use it. Statista.com reckons that Facebook has 2.89 billion regular users every month. If each user were to credit their account with just $1, that means that Facebook would have, yes, $2.89 billion dollars in their bank account overnight. That's enough for them to use that liquidity to participate in overnight loans to big banks, at attractive rates of interest.

    Apparently it's not enough for Facebook to sell you like a product. Now they want you to give them your money so they can "keep it safe" for you.

    The advice remains: just say "NO!"

    • Re: (Score:2)

      by nyet ( 19118 )

      > But once you put it "in" the Store, you can't get it out again. You can only spend it.

      That is not true.

    • Novi contrary to standard crypto wallets is promising fraud detection and refunds for theft. That's a pretty valuable service.

      It's more like paypal with blockchain underneat for regulatory reasons, not a standard use it and loose it cryptowallet.

  • Sorry, No (Score:4, Insightful)

    by Aighearach ( 97333 ) on Tuesday September 07, 2021 @06:55PM (#61773553)

    "[W]e're starting with a trust deficit that we need to compensate."

    No. If you haven't taken serious, long-term steps to rebuild trust, and then waited to reap the results of those efforts, you won't be trusted.

    Having big tires, or thin tires, or a loud stereo, or a muffler that makes your car/website sound like it's flatulent, none of these things will "compensate" for a lack of trust.

    If you don't have trust, you're still untrusted. A digital wallet isn't something where people say, "Well, I don't trust them not to lose my money, but they gave me a coupon so it's OK." No trust = no deal

  • Next up: Hitler comes out of hiding to run for "first president of the world", and proclaims a "trust deficit".

  • I could see myself thrusting them somewhere, but trusting them?

    That's a joke, right?

  • "[W]e're starting with a trust deficit that we need to compensate."

    I can only read that in the most callous, cynical way possible.

    "We've proved our worth to the CIA by experimenting with manipulating people's moods, and we've proved that we will respond to government demands for censorship. However for user adoption of this project we will need to consult reputation management firms and conduct a well-funded media advertising campaign, to help offset our past abusive practices. We can also drive adoption by

    • Paypal, banks and creditcards have cooperated with extralegal government censorship to an extent which makes Facebook's actions defacto non existent.

      It would be nice if some other company set up an universal low fee no chargeback payment system, but Facebook is better than nothing. They had to let the permissionless design go, but without chargebacks the biggest excuse creditcards use for censorship goes away. I'm not sure the association won't ever be swayed by won't someone think of the children/women/jew

  • A trust bankruptcy.

  • ...To go out of their way to make the most self-serving decision possible in every single situation, screwing over their users in the process.

    /Remember: If you aren't paying for a service, you aren't their customer -- you are the *product* they sell to their actual customers, the corporate advertisers.

  • "Dumb fucks."
    - Mark Zuckerberg

  • That's about the same trust I had in them when hollywood was making movies about Zuck and when they suddenly became crystallized evil which forever could do no right again. Not because some third party used advertising data to advertise a wrong bad politician, but because suddenly and by complete coincidence privacy got super important.

  • There's little chance of Facebook convincing the U.S. government that their crypto-coin is a good idea, since its reach could undermine the hegemony of the USD.

    And that's something they'll literally fight a war over to prevent.

  • Facebook will be toast when we boomers, their only users, all die off, not too long from now. They better be putting eggs in their instagram basket.

  • Facebook, beyond it's unethical business practices and borderline criminal behavior, should be regulated under US federal anti-trust laws. It's dominant market share means expansion into collateral lines of business should be restricted with regulators deciding what is and is not allowed.

    That is what should happen in theory. In practice there is no effective anti-trust oversight in the US at all. The economy is composed of behemoth corporations that crush competition, exploit workers, steal from consumers,

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