Facebook Announces Partnership with PayPal for Ad and Credits Payments
Facebook is partnering with eBay-owned PayPal, the two companies are announcing today, so that people can buy Facebook advertising and its virtual currency, Credits, using the online payment service.
Although some have speculated that Credits could become a PayPal rival, this partnership suggests that Facebook is going to continue building Credits as a virtual currency, and not as a payments service. The press release today says as much: “The goal of Facebook Credits is to give users a fast and easy way to buy virtual goods on Facebook, including items from the Facebook Gift Shop.” Other ways to buy items include mobile payments, via a partnership with Zong, and direct payments via credit cards.
The statement from Dan Levy, Facebook’s director of payment operations: “We want to give the people who use Facebook, as well as advertisers and developers, a fast and trusted way to pay across our service. As our business has grown, offering local methods of payment has become increasingly important for advertisers who want to buy Facebook Ads. Teaming with PayPal, a global leader in online payments, makes this possible.”
PayPal’s advantage is that it is a thoroughly-developed online payment service, popular abroad and with smaller businesses. It is also a mainstay option with offer walls and other payment interfaces within third-party games and other applications on Facebook.
February 18th, 2010 at 4:09 pm
I don’t really understand this latest move by Facebook, but then again I wasn’t present at the meetings, so it could be that I am missing part of a ‘grander’ strategy. On the one hand, it paves a road for Facebook to demand Facebook Credits and ‘push out’ the virtual currency platform companies. But, on the other hand, it opens the door for a universal virtual currency that has the ability to move both in-and-out of the Facebook gaming environment.
Paypal is simply a VISA/MC/bank account intermediary and Facebook is certainly free to develop/extend those cc relationships, especially with Peter Thiel on the board of Facebook. This is a layer on a layer on another layer to purchase Facebook Credits. Facebook needs revenue and their most promising path to revenue had seemed to be via exploiting the payment platform space! Maybe this move will now give juice to the freely-convertible universal currency notion now that Facebook is out of the way.
–Jon Matonis
http://themonetaryfuture.blogspot.com
February 18th, 2010 at 8:42 pm
I don’t understand why they need PayPal when they are quite successful with there current Payment method.
February 18th, 2010 at 9:30 pm
>>Paypal is simply a VISA/MC/bank account intermediary
if you really believe that, you don’t understand the online payments ecosystem. PayPal is a native payment option for people with PayPal balances (perhaps 2-10% of online users in the US, maybe more). at the very least, it’s a simple payment option for many people that makes transacting easier, for the most part (as many larger e-commerce players now realize & have implemented).
in the long-run, it’s likely that Facebook will develop its own alternatives, but in the short-term it’s foolish for FB to not offer PayPal as a payment option. what’s curious is why it’s taken them 2-3 years to figure that out.
in any case, i’d expect more payment options (both direct & indirect) from FB in the future.
Q: “why do you rob banks?”
A: “because that’s where the money is.”
February 19th, 2010 at 6:33 pm
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June 25th, 2010 at 12:04 pm
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June 25th, 2010 at 8:06 pm
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October 20th, 2010 at 10:18 am
i have a paypal account and i love it but i did an ad on facebook and choose to paypal funding and it took forever on facebook i dont know whats wrong with facebook but they need to set their game up because theirs alot they can do to make their site better (im still here waiting for this paypal thing)