Facebook is in the early stages of testing a new payment system that would store users’ credit card information for use in mobile transactions, but would not complete any transactions directly. Instead, the system would complete payments through third parties such as PayPal.
Why does Facebook want to store a user’s credit card information if it is not conducting any actual transactions? According to a statement from the company, this process “gives people the option to use their payment information already stored on Facebook in a mobile app.” Their goal is “to make it easier and faster for people to make a purchase…by simply pre-populating your payment information.”
This payment system is in the very early testing stages, but remains a significant move because it takes Facebook yet another step closer to being an all inclusive site, one that hordes an individual’s every data point and effectively connects all people to everything all the time. Have you noticed how you can often choose to “log in through Facebook” when logging into a third party site? Even if you don’t want to have your Facebook account linked to the other site, it’s tempting because to select that option is so much easier than creating yet another online account. This mobile payment thing is just like that—but with credit card data.
Facebook frames the move as a way to “help apps provide a simpler commerce experience.” But it’s obviously about more than just alleviating the annoyance of having to enter one’s payment data on a mobile device. It’s also about collecting user data and about attracting advertisers. The more Facebook knows about each user, the more the company can tailor individual experience, including—and especially—advertisements.
What does this mean for business owners? If the payment system expands and becomes a regular Facebook feature, it could mean that your customers will have a simpler path to completing mobile payments—because have you ever met anyone with a smartphone who isn’t constantly logged into Facebook?
Currently, Facebook is testing this new payment system with a single flash-sale shopping site called JackThreads. Will the test be a success? That obviously depends on many factors, including users’ willingness to trust Facebook with their credit card information. Personally, the thought makes me uneasy—but as addicted as I am to Facebook, I’m still something of a holdout when it comes to the social network; I don’t even list my hometown or the kind of music I like in my profile. But that’s beside the point. The point is that Facebook is making a push into mobile payments, leaving the rest of us to wait and see how this test goes and what move the company decides to make next.