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In a bold new move after the crash and burn of Facebook Credits, Facebook is to test its own PayPal competitor in bid to simplify mobile purchases.
According to Allthingsdigital, Facebook plans to test a new payments product that would allow online shoppers to make purchases on mobile apps using their Facebook login information.
The product, sources said, would allow any shopper who has previously provided Facebook with their credit card details to make purchases on partnering e-commerce mobile apps without entering billing information.
Facebook confirmed the test, which is expected to launch in the next month or so, to AllThingsD.
Thrillist-owned JackThreads, a flash-sale shopping site for young men, is the pilot partner. The company has a strong relationship with Facebook, sees a good chunk of revenue come through mobile phone purchases and may also have a decent demographic overlap with one particular segment of Facebook users — gamers — who would have provided the social network with credit card information. It will be interesting to see if Fab, another close partner of Facebook’s that does well on mobile devices, will follow suit.
The new product, if launched widely beyond its current small testing phase, would undoubtedly pit Facebook against digital payments giant PayPal on mobile devices. It would also compete with offerings from Google, Amazon and a host of startups such as Braintree, Stripe and Klarna, all up-and-coming outfits that are working, in one way or another, to make it easier to make purchases on mobile phones. All of these companies, including Facebook, recognize that it can be challenging to easily enter your payment details on small devices.
If eventually expanded to more partners, the product would also potentially give Facebook keen insight into the shopping habits and preferences of the company’s users, a lucrative set of data for the world’s largest social network to gather.
This could have implications in terms of tCommerce and Facebook's emerging and aggressive Social TV strategy.