Facebook is testing a new mobile payment feature as it explores ways to boost revenues from advertisers by showing that ads on the social network lead directly to purchases. The feature will draw on credit card information already stored with Facebook to automatically fill in a payment information form when a person wants to buy a product via a mobile shopping app.
“The test is designed to make it easier and faster for people to make a purchase in a mobile app,” Facebook said cited by Financial Times, adding that the test was in the early stages and involved just two e-commerce partners. The trial comes as Facebook successfully implemented advertising in its last quarter, when it doubled revenues from e-commerce companies buying ads on the site compared to the year before.
“This product is simply to test how we can help our app partners provide a simpler commerce experience,” Facebooks spokeswoman Tera Randall said in a statement. She added that the firm has a “great relationship” with PayPal, one of the biggest processors of online payments. Analysts noted that if the site does eventually launch the payment feature it will help it track how many of its users actually purchased items from partner applications.
AllThingsD informed the feature will launch sometime in the next month. The first partner is JackThreads, an online shopping site for young men, according to AllThingsD, which said Facebook was interested in partnering with JackThreads because some of its customers may be gamers and have previously shared payment information with Facebook.
As of right now, the report said, the Facebook test feature wont actually operate payment processing but will simply provide the billing information and speed along the process. But if the test is successful, Facebook may decide to get involved with payment processing, simultaneously cutting out competitors and creating another line of revenue.
Facebook members would not need to be on the social network site to buy products. Users who have previously entered their credit card details into the Facebook database would be able to make purchases using partnering e-commerce mobile apps without needing to enter billing details. The process is similar to PayPals and most likely would compete with the online payment giant.
Facebook shares slid 0.25% yesterday while being on a 37% rally this year.
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