Facebook – shifting its approach to payments
Our last post discussed the idea of frictionless transaction processes.
i.e. Bringing the transaction point to the medium in which the consumer is engaging with.
Now we have a real life example to play with.
Social media giant Facebook is amongst the first to adopt this method of thinking, introducing a native transaction process to its ever-growing list of services.
Until recently, Facebook had its own virtual currency called Facebook Credits, which were used mainly to buy virtual goods in games such as Farmville.
Facebook took a 30 per cent cut from those sales, contributing a whopping 15 per cent of the company’s total revenue in 2011.
Now, Facebook plans to take things to the next level as a one stop payment platform. Appealing to companies that fall well outside the game developer community, Facebook is encouraging them to sell their goods and services within the social networking platform.
Users will be able to enter and store their credit card or Pay Pal information on Facebook, which will allow them to utilize the two major changes taking place:
Firstly – the ability for users to subscribe to services that require monthly payments.
Secondly – the option to pay for one off goods and services in just one click, within Facebook, in their own currency rather than credits.
“By supporting pricing in local currency, we hope to simplify the purchase experience, give you more flexibility, and make it easier to reach a global audience of Facebook users who want a way to pay for your apps and games in their local currency.”
The added benefit to having users purchase goods and services within the platform is the ability to harness more data about their purchasing habits – information that can then be utilized by Facebook’s advertising department. A smart move after its disaster riddled IPO launch, which has seen investors focusing on the company’s revenue more than ever.
What are your thoughts on this move?
Ahead of the times, or clutching at straws as the share price plummets?