The race to converge US messaging applications with payment services has an unlikely contender for the champion. Small, California-based encrypted messaging app Signal tests an anonymous digital payment feature. It encompasses everything regulators are afraid of.
Making money from messaging programs remains a work in progress. Facebook (now called Meta) paid $ 19 billion for WhatsApp in 2014, but has not yet received revenue, although advertising and e-commerce transactions are expected. It tested in-app payments, but only in Brazil and India.
Signal promised never to sell data or show ads. Instead, it relies on user donations. Although the application benefited from WhatsApp’s clumsy attempt to change its data sharing policy last year, it was estimated at just 2 percent of WhatsApp’s global user base. Adding payments can add more.
Signal’s project allows users to link MobileCoin wallets to their account. MobileCoin is a so-called privacy currency designed to hide user identities and their transactions. It fits Signal’s privacy-focused model. It also suits the needs of those hoping to move money without finding law enforcement agencies.
For now, the project is too small to cause much concern. Using a wildly volatile cryptocurrency is not tempting. According to CoinGecko data, MobileCoin’s price increased by more than $ 67 in April 2021, but now trades at less than $ 10. It is also not easy to obtain. It is only available on a small number of exchanges.
This does not mean that the US Securities and Exchange Commission is not paying close attention. Messaging app Telegram abandoned its own cryptocurrency plans when it faced an SEC battle. Meta’s crypto project Diem has received a setback from regulator. Project leader David Marcus has since left the company. Signal’s anonymous payments will not be applauded by anti-money laundering organizations.
The exit of Signal’s own boss Moxie Marlinspike – an advisor from MobileCoin – suggests that the payment project will remain limited. Brian Acton, CEO, is now interim CEO. Acton, co-founder of WhatsApp, left Facebook after fighting over his plans to earn the app. Commercial growth is not a priority. Regulators may worry, but competitors may relax.