Report: Facebook trialing in-app mobile payments platform
Facebook (NASDAQ:FB) is poised to launch a new payments platform enabling consumers to make purchases within mobile applications using their Facebook login information, AllThingsD reports.
Sources familiar with the social networking giant's plans said any shopper who has previously provided Facebook with credit card account information will be able to complete purchases across partnering mobile apps without re-entering their billing data. Facebook is kicking off the pilot in tandem with Thrillist-owned JackThreads, a flash sale site targeting the young male demographic.
Facebook confirmed the payments trial to AllThingsD but did not supply additional details.
Moving into the mobile payments segment pits Facebook against a host of competitors, most notably eBay-owned PayPal, which supports 132 million digital wallets across 193 countries. PayPal mobile handled almost $14 billion in payments in 2012, more than triple the prior year, and is on pace to exceed $20 billion this year. "It sounds like a dead-on competitor of PayPal," Forrester Research retail analyst Sucharita Mulpuru told AllThingsD.
"We have a great relationship with Facebook and expect that to continue. Our customers love using PayPal on Facebook," a PayPal spokesperson said in a statement. "We've been investing in mobile payments since 2006, and last year 10 percent of our total payment volume--$14 billion--was from mobile devices. However, we always welcome competition and are looking forward to seeing what Facebook will announce."
Facebook already supports commerce services like gifting and in-app virtual goods purchases, but the number of credit cards it has on file is unknown. Mulpuru speculates that no more than 10 million U.S. consumers have supplied account information to Facebook.
"Nobody trusts social networks with their financial information, and they are certainly not going to trust Facebook," Mulpuru said. "Maybe they have a few million people that have bought something on things like [Zynga's (NASDAQ:ZNGA)] FarmVille, but that does not a network make."
Mulpuru contends Facebook would be better off building a platform for Facebook-centric small businesses that now mainly conduct business through inefficient mediums such as email. "PayPal is well-suited because they have more than 100 million accounts with real people who have trusted them with their information," Mulpuru said. "To be a latecomer to the game in something as complex as payments, [Facebook] would be better off buying Square."
As of the second quarter Facebook now boasts 819 million mobile active users in all, increasing 51 percent year-over-year; mobile daily active users now exceed 469 million. "Nearly half a billion people use Facebook on their phones every day and soon we'll have more revenue on mobile than on desktop," Facebook CEO Mark Zuckerberg said during the company's second-quarter earnings conference call last month.
- read this AllThingsD article
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