Facebook Inc (NASDAQ:FB) travels the mobile payment route

Posted by Kristi Scott August 26, 2013 0 Comment 1524 views

A lot of people are of the opinion that now that Facebook Inc (NASDAQ:F) has gained mass-media appeal, it has donned a garb of complacency. However, this has never been the case. It has never been a company that simply rested on its laurels. FB never ceases to surprise and it has just confirmed a completely new product.

FB has confirmed that it is all set to test a new mobile-payment service. This service will permit buyers to make a purchase merely with a FB login. This is not the first time that the company is foraying into the Ecommerce space. However, unlike the earlier credit system, this new service is designed to simplify mobile transactions. The first attempt met with failure largely because a secondary-currency ended up complicating things.

How are mobile payments different?

If the company is able to pull off this new plan successfully, it will make a significant difference to their ad service. It will automatically give FB, much-needed insight into buyer habits. As per FB’s latest earnings release, currently, advertising revenue makes up 88% of its total revenue. Adding the advertising impetus to shopping data will have a highly positive impact on Facebook’s revenues.
As of 30 June, Facebook reported 891M monthly active mobile-users. Convincing just a small section of this number to use this new payment system will definitely help the company rake in some big dollars. If the company eventually decides that it wants to be part of the payment-processing business, it definitely has the muscle to turn into a huge source of revenue.

The allure of money

However, the one thing that FB has made very clear is that with this service test-run, it is not entering the EBay arena. However, there is nothing to stop the possibility that they will do so some time in the future. For EBay, Its PayPal unit is a big source of revenue and it commands a huge amount of processing-traffic and this fact is not lost on FB.

About Kristi Scott

Kristi Scott joined GDP Insider in 2005 as a Wall Street reporter for the Business and Market section. Kristi covers the stock market, financial markets and personal finance. Her awards have come from the National Federation of Professional Writers, the Ohio Newspaper Association, the Cleveland Press Club, the Society of Professional Journalists and Suburban Newspapers of America. Kristi was named SNA's national Journalist of the Year

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