Facebook are testing a new service that would facilitate automatic checkouts for purchases of some mobile apps. This would involve users saving their payment information on Facebook, meaning that purchases could be completed within seconds. It is not known when the new service might be made available to its users.
A “Great Relationship” With PayPal?
The company recently confirmed that it was working on a “very small test”. It is thought that the payments will involve PayPal technology, after a spokeswoman said that the social media site had a “great relationship” with the payments facility. Tera Randall said “this product is simply to test how we can help our app partners provide a more simple commerce experience.”
Potential Threat To eBay
Randall said apps that are currently associated with PayPal payments won’t be forced to move away from the provider. Upon the news being revealed, shares in PayPal’s owner eBay declined, presumably as a result of a proposed competition. Denee Carrington, a Services Research analyst said that she though Facebook might find it tough to offer mobile payments, even though it already has a large database of its user’s credit card information. Carrington cited potential problems with trust, claiming “Consumers want safe, seamless and convenient mobile payments and there are a growing number of competitors that consumers trust more — such as PayPal, Visa (V.me) and others,”
A Place For eCommerce To Happen
Facebook now has more than a million users, with around 50% of them logging in on a daily basis. This has inevitably led to ever-growing levels of interest from advertisers. The company generated advertising revenue of £1bn in the second quarter of this year. It’s thought that automatic payments would allow the company to track the number of its users purchasing apps from its advertising partners. Manoj Menon, MD of Frost & Sullivan said “Facebook does not want to remain just a platform for brand promotion and lead generation, but it wants to become the place where ecommerce deals actually happen”.