Facebook is testing a new mobile payments product that would allow users to buy items in third-party apps simply by entering their Facebook login information, according to All Things D.
If the reporting is correct, the new payments product, expected to launch in about a month, would let anyone who has previously supplied Facebook with their credit card information to make purchases in other mobile apps just by supplying their username and password. This would be a much easier substitute to the often-painstaking process of having to type out an exhaustive list of billing information each time you want to buy something, especially if you’re on a mobile device. It would also pit Facebook as a direct competitor to PayPal, as well as upstarts like Braintree, which processes payments for popular mobile apps like Uber, Airbnb, and Fab.
Facebook has experimented with various payments and e-commerce initiatives over the past several years. Facebook Gifts, a service the social network currently offers, lets users gift items to friends within Facebook from third parties like Starbucks, iTunes, and Dean & Deluca. But a payments product that lets Facebook track what users are purchasing in other apps would clearly open up a trove of data that’s extremely valuable to advertisers. It would also give Facebook an opportunity to increase the revenue it derives from processing payments, which was a relatively tiny $214 million of the $1.8 billion the company reported in its second-quarter earnings.
Update: Facebook provided a statement to All Things D, which downplays the idea of a Facebook payments product that would compete with PayPal. Facebook sent this statement to Fast Company:
We are working on a very small test that gives people the option to use their payment information already stored on Facebook to populate the payment form when they make a purchase in a mobile app. The app then processes and completes the payment. The test is designed to make it easier and faster for people to make a purchase in a mobile app by simply pre-populating your payment information. It will be a very small test with 1-2 partners. Additionally, this test does not involve moving the payment processing away from an app’s current payments provider, such as Paypal. 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.
[Image: Flickr user 401(K) 2013]