Facebook, which is always looking to monetise its user base, is now taking aim at trying to get a cut of the global e-commerce market.
The social media leviathan is looking to test a new payment product that will allow shoppers to buy on mobile applications using their Facebook login details, AllThingsD reports, citing sources "familiar" with Facebook's plans.
According to the report, shoppers who have previously registered their credit card details with the site will be able to shop on partnering e-commerce mobile apps without entering their billing information.
However, the new service does not seem to be a competitive offering to the global de facto payment gateway, PayPal, but rather a closer relationship between the two entities.
AllThingsD says Facebook confirmed the test and it should launch in the "next month or so" with pilot partner JackThreads, a discount site aimed at young men. Facebook's pilot, reports the site, is aimed at creating a better mobile checkout experience and not getting involved in actual payment processing.
Have to try
In statements, both Facebook and PayPal said they had great relationships with each other, while Facebook says the test is to see how it can help app partners provide a simpler commerce experience, reports AllThingsD. "This test does not involve moving the payment processing away from an app's current provider."
Arthur Goldstuck, MD of World Wide Worx, says Facebook wants to monetise its huge user base in as many ways as it can and, if it can get a cut of the global e-commerce space, it would be silly not to try.
Globally, the market is estimated to be worth around $963 billion this year, having leapt from $159.7 billion, in 2004. Locally, according to World Wide Worx, e-commerce is expected to account for R4.2 billion, which is a fraction of overall retail sales.
However, Goldstuck points out that its concept of dollar-based credits, which could be bought and used on the site, but not converted back to real money, does not work as it is too complicated. He adds Facebook's move does not mean it will become the dominant force in the space.
As PayPal is available locally, South Africans will also be able to make use of the offering, should this be the way Facebook goes, says Goldstuck.
PayPal is available in 190 countries and 24 different currencies, and made its debut in SA about three years ago via First National Bank (FNB). It is now available to non-FNB customers, but still only has about 7 000 locals signed up for use, although the merchant base is growing.
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