Facebook payments? Report on new product release spurs debate
By Jay Keller
According to an Aug. 15 report from AllThingsD.com, Facebook plans to test and launch a new payments product in the near future that would allow online shoppers to make purchases using personal Facebook login information.
The information published by AllThingsD was confirmed by Facebook through an unnamed source familiar with the company’s plans.
“The product, sources said, 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,” AllThingsD reported.
Facebook has not publicly confirmed that a new payments product exists or announced a timeline that outlines plans to test or launch such a product.
The social network did, however, release recently new functionality allowing gamers to easily buy game credits. In these instances, the gamers entered payment information ahead of time, choosing between PayPal, Visa, MasterCard and Discover, for example.
AllThingsD said on Aug. 15 that if Facebook were to launch a new payments product, the new product would “undoubtedly pit Facebook against digital payments giant PayPal on mobile devices.”
News of the product release and the speculation about a direct competitor to PayPal on mobile devices caused a wide debate across the industry with some experts discrediting the report while others running with the story completely.
Shortly after the article was published, the PayPal source reportedly sent AllThingsD a clarifying statement that portrayed PayPal as a partner instead of a competitor.
“We continue to have a great relationship with PayPal, and this product is simply to test how we can help our app partners provide a simpler commerce experience,” AllThingsD wrote in a Noon update published inside the article. “This test does not involve moving the payment processing away from an app’s current provider.”
Facebook Payments is currently transitioning away from Facebook Credits to local currency by Sept. 12, 90 days after making the announcement to game developers regarding Local Currency Payments.
According to Facebook, the new payments system deals mostly with game developers to help simplify the “purchase experience for users, improves the performance of the payment flow, and makes it easier for developers to price virtual goods for a global audience.”
Facebook reported that payments and other fees generated $214 million during the second quarter of 2013, posting an 11-percent increase in revenue over the same quarter last year.