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Facebook to test new mobile payment service

Zach Miners | Aug. 16, 2013
Facebook's new mobile payment system may place it in direct competition with PayPal.

But if Facebook scales out the program, it could become competitive with PayPal and other e-commerce businesses from an end user perspective, said Greg Sterling, senior analyst with Opus Research. One scenario is that Facebook's users may decide they prefer to keep their payment information on file with the social network rather than set up an account with PayPal, he said.

Meanwhile, Facebook faces pressure to generate more revenue on mobile devices as its users migrate away from desktop computers. The company currently has more than 800 million monthly active users on mobile, up more than 50 percent from a year ago, Facebook reported during its second-quarter earnings call. Facebook has more than 1 billion users total.

Facebook has no immediate plans to charge a transaction fee to partners in the program, given that the social network is not currently processing the transaction.


PayPal could not be immediately reached to comment on Facebook's mobile payments plans, which were first reported by The Wall Street Journal's AllThingsD tech news site.


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