Facebook's testing a new mobile payments program for online purchases

Look out PayPal . . . Facebook is working on a new online payments system that would let shoppers buy clothing or other goods simply by logging into a retailer’s mobile app with their Facebook account, provided they’ve already given Facebook their credit card information.

In addition to PayPal, of course, Google, Amazon and several startups have been working on their own mobile payments systems. The new program, first reported by the tech blog All Things D, is the latest of several efforts by Facebook to tap into the purchasing power of more than a billion users who spend a good chunk of their time on the social network.

Facebook once required users to buy “credits” and then use them to purchase virtual goods for online games or other apps on the network. But it phased that out more than a year ago in favor of simply letting users make those purchases with their credit cards.

Since then, Facebook has experimented with other programs for selling real-world “gifts” – including flowers, chocolate and other items – that Facebook members can have delivered to their friends, and even a Facebook gift card that allowed members to give their friends the equivalent of a gift certificate for certain retailers.  Facebook also lets users pay a few bucks to deliver messages to people they don’t know.

The new program would build on the fact that Facebook already has credit card information on file for many of its users.  Rather than act like a bank to process the payments by itself, Facebook could simply pass the transaction information over to the retailer or credit card company.  The program would also give Facebook more data about users’ shopping habits, which it might use for targeted advertising.

Facebook is starting out by partnering with JackThreads, a menswear site aimed at young consumers, many of whom also happen to play a lot of online games, according to All Things D.  In a statement, a Facebook spokeswoman confirmed the company is working on a limited test:

“We are working on a very small test that lets people populate their payment information already on file with Facebook into the checkout form of a mobile phone app when they are making a purchase. The app then uses their existing payments processor to complete the transaction.

“The test makes 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.”

(Photo of sample Facebook gift card/Facebook)

Brandon Bailey Brandon Bailey (338 Posts)

Brandon Bailey covers Google, Facebook and Yahoo for the San Jose Mercury News, reporting on the business and culture of the Internet.