Facebook payment: Facebook Inc (NASDAQ:FB) has teamed up with app developers and payment processors, in an effort to improve online purchases. The partnership includes eBay Inc (NASDAQ:EBAY)’s Pay Pal, Braintree Payment Solutions and Stripe, to e-commerce sites JackThreads and Mosiac. By releasing its “Autofill With Facebook” option on Monday, the social network seeks to make online payment services faster and easier to use. Users will be able to autofill payment and shipping information through their Facebook profiles, saving them a great deal of time when making purchases.
In August, reports emerged that indicated Facebook would be launching its own service, which would challenge PayPal directly. However, the company seems to have settled for a partnership. Collaboration with eBay, Braintree and Stripe will result in processing fees for the firms mentioned, whilst competition with Facebook will be avoided. The social networking behemoth expects consumers to make purchases more frequently, since their Autofill with Facebook service reduces the buying process to a single click.
Although it is not imminent, many anticipate that Facebook will be positioning itself to compete with the likes of PayPal in the future. Once enough credit card information has be gathered and customers secured, the social media giant could elaborate its own payment processing service. That way, the firm could be looking at a larger cut from mobile purchases.
Despite this argument, critics believe Facebook will have a hard time convincing users to hand over credit card information. The company’s data privacy policy changes have been making headlines recently, with user information protection being the main source of controversy. Nevertheless, TechCrunch has indicated that when it comes to information security, “the social network has a relatively solid track record”.
Either way, Facebook will be dealing with a strong competition should it decide to introduce a separate payment processing service. PayPal is already negotiating the purchase of Braintree, a company responsible for processing $10 billion in mobile payments annually.
As consumers replace PCs with a mobile phones for their computing needs, mobile payments rise at an accelerated pace. Research by Gartner suggests a 31% increase in mobile payments this year, compounding a $253.4 billion market, which is expected to triple in volume by 2017. Facebook is keen on taking home a piece of the pie and for now, the collaboration with well trusted services such as PayPal is considered the safest way to do so. Check back here for more updates on Facebook payment information.
Disclosure: Pablo Erbar holds no position in any stocks mentioned
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