How ecommerce could benefit from Libra cryptocurrency?

July 26th, 2019 by Azur Digital

Who has not abandoned an online purchase because of payment issues? Untrusted payment page, hefty currency conversion charges, slow loading time, refused card… in a world where it is all about immediacy and convenience, these are some of the numerous situations where consumers drop at checkout, contributing to the 69.57% average cart abandonment rate.

This is where Libra could help. Recently revealed by Facebook, Libra is a new currency – a cryptocurrency – which mission is to become a global currency backed by a financial infrastructure that could empower billions of merchants and individuals.

In this article, we will quickly explain how Libra works, and more importantly what it changes and the benefits it could bring to customers and retailers alike.

What is Libra?

Libra is a digital and virtual currency built around three particularities that will work together to create a more inclusive financial system, being: 

  • built on a secure, scalable, reliable, but unlike many other cryptocurrencies, a centralised blockchain
  • backed by a reserve of assets designed to prevent volatility often seen with other cryptocurrencies
  • governed by the independent Libra Association whose mission will be to evolve the ecosystem.

Partnering with some heavyweight partners like eBay, Farfetch, Visa, MasterCard, PayPal and many others, Libra is aimed at addressing many global issues, including financial exclusion, high transaction fees and slow remittance times.

Inclusion, cost and speed challenges of traditional transaction solutions

Facebook’s presence in Libra project is of high importance to foster the adoption of the cryptocurrency at a global scale. However, it also comes at a cost of strong resistance from multiple regulators across the globe, given the audience reach and data privacy concerns. Certain countries are already asking Facebook to park the development and others are talking about completely banning Libra.

Nevertheless, the likelihood of wide adoption of cryptocurrencies is high, as other competitors continue developing whilst Libra gets the spotlight. For example, Telegram messenger is planning to release this October its own blockchain network and currency to serve it’s 260 million users base. It promises similar functionality, high level of security, speed, scalability and decentralisation.

Getting started

So how would customers start using Libra?

Firstly, they would need to download an electronic wallet such as Facebook’s own “Calibra”. Secondly, when users first sign up, they’ll be taken through a Know Your Customer (KYC) anti-fraud process where they’ll have to provide a government-issued photo ID and other verification information. In the background, transactions on Libra network will have to undergo due diligence process and comply with international regulations.

Ultimately, this will allow customers to benefit from a trusted service they can sign up to in no time.

Purchasing online using Libra – the customers perspective

From a customer point of view, Libra promises to make life easier in a multitude of situations such as cross-border payments between friends and family, micropayments within Facebook applications or transactions on Facebook’s marketplace, with small-businesses and potentially other financial services as Libra’s technology matures. Customers would get a reliable, secure and stable payment method which will allow them to pay low to no fees and wait only a few seconds for each transaction to complete.

In time, we hope to offer additional services for people and businesses, such as paying bills with the push of a button, buying a cup of coffee with the scan of a code or riding your local public transit without needing to carry cash or a metro pass

The Calibra team.

Integrating Calibra into Facebook’s ecosystem would mean a value proposition very similar to China’s app WeChat. Their users can order a taxi, book railway & flights tickets, hotels, cinemas, pay for utilities and public services, do a P2P transfer, all while staying within the app.

WeChat e-wallet allows all sort of transaction without leaving the ecosystem

With Facebook’s multiple ventures into enabling commerce capabilities in their family of applications (e.g. Facebook with its Marketplace, Messenger with its P2P payments and chatbots, Instagram with it’s ecommerce integration) and a huge customer base (approximately 2.3 billion users), Libra could become the norm, the natural entry point for placing ecommerce orders, transferring money to friends and doing micro-payments.

Implementing Libra as a payment method – benefits for online retailers

From a retailer’s perspective, Libra would help ecommerce players address existing payment pain points: high fees, checkout experience and reliance on third parties enabling the payment. Libra could make the checkout more convenient to the larger audience and remove intermediaries out of the transaction flow, thus reducing payment fees (currently retailers are being charged between 2 and 4% per transaction).

Making a trasaction with a payment card vs with Libra
Using Libra would cut down the number of intermediaries and therefore the cost and time of the transaction

Being somewhat close in its value proposition to PayPal, Libra could serve as a boost for ecommerce entrepreneurs and SMEs as once PayPal did, by providing them with an access to an hassle-free payment solution without having to wait for the completion of the bank account opening process (mandatory physical office, incorporation documents, high financial requirements) and payment gateway providers requirements (contract negotiation, minimum turnover requirements, transaction fee). But unlike PayPal with its hefty fee (2.9% + 30 cents per transaction), Libra promises retailers much better financial terms.


A wide adoption of Libra would be beneficial for retailers, adding the possibility to tap into:

  • a wider share of the market, e.g. the unbanked, international clientele,
  • lower processing fees – adding up to 4% revenue to the margin, 
  • and instant remittance – from days to seconds.

For customers, transactions could happen seamlessly and on many more different touchpoints, from Instagram down to messaging applications, offering shorter paths from inspiration to purchase.

The array of new possibilities wide-adopted cryptocurrencies can offer is yet to be explored, and the future of Libra as a currency is unknown. However, with this announcement, Facebook is paving the way by showcasing cryptocurrencies tangible everyday applications and their benefits.