Facebook is Taking on PayPal with Online Payments

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Facebook is working on a service that will let users complete mobile purchases using their log in credentials for the social networking site. It is the company’s attempt to compete with PayPal, and Facebook already has some e-commerce partners lined up to test the initiative.

\"facebook\"Currently, the pilot partner is JackThreads, a shopping site targeted at young men. Users that have used Facebook to make purchases in the past, whether for games or Facebook gifts, will be able to make quick purchases through compatible services without entering billing information. Facebook currently lets users make in-game and gift purchases through PayPal.

This move could also bolster Facebook\’s advertising efforts, since the company will not only have information offered by users\’ profiles, but also their shopping and spending habits. However, Sucharita Mulpuru, a retail analyst at Forrester Research, believes this is the exact reason Facebook will not make a significant dent in the online payment sphere.

AllThingsD quoted Mulpuru as stating “Nobody trusts social networks with their financial information, and they are certainly not going to trust Facebook. Maybe they have a few million people that have bought something on things like FarmVille, but that does not a network make.”

Whether users are excited for the new feature or not, initial test of the new program will launch within the next month, according to confirmation by AllThingsD.

Source: AllThingsD

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