Facebook has consumed a lot of our time, and now it’s time it will take more money from our pockets. Currently Facebook is to begin to test its own PayPal competitor in bid to simplify mobile purchases. Facebook plans to test a new payments product that would allow online shoppers to make purchases on mobile apps using their Facebook login information, according to sources familiar with the company’s plans.
The product, sources say, would allow any shopper who has previously provided Facebook with their credit card details to make purchases on partnering e-commerce mobile apps without entering billing information.
Facebook confirmed the test, which is expected to launch in the next month or so, report by AllThingsD.com
The new product, if launched widely beyond its current small testing phase, would undoubtedly pit Facebook against digital payments giant PayPal on mobile devices. It would also compete with offerings from Google, Amazon and a few start-ups providers to make it easier to make purchases on mobile phones.
All of these companies, including Facebook, recognize that it can be challenging to easily enter your payment details on small devices. If eventually expanded to more partners, the product would also potentially give Facebook keen insight into the shopping habits and preferences of the company’s users, a lucrative set of data for the world’s largest social network to gather.
At the same time, Facebook’s test is, for now, focused solely on creating a better mobile checkout experience, rather than getting involved in payment processing. That setup allows partnering commerce companies to still work with payment processors of their choice. Yet, part of the pitch to merchants from companies like PayPal is the simplification of the checkout experience, which Facebook is now going after.
A PayPal spokesperson said that PayPal still have a great relationship with Facebook and expect that to continue. Currently the main channel of payment on Facebook is done via PayPal. Last year Paypal has total payment volume of $14 billion (420,000 million baht) and 10% of this amount was from mobile devices.
The checkout product could also potentially provide Facebook and its advertisers with valuable insight into what type of products its users are buying off of Facebook. What is unclear, however, is just how many credit cards Facebook actually has on file.
The social giant has also used its “Gifts” product to bolster the company’s cache of credit card numbers. Launched nearly a year ago, Facebook Gifts allows users to send one another real physical goods via the Facebook platform. In order to purchase items, users need to enter their credit card or PayPal info, which Facebook then stores in perpetuity.
This isn’t the first time Facebook has tried to position itself inside the e-commerce arena. The company launched its Credits initiative in mid-2009, essentially an attempt to create another form of virtual currency for users to purchase items via the Facebook platform. But the experiment was scrapped in the summer of last year, chalked up to overcomplicating what should be a friction-free, painless process.
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