Today social network Facebook announced that it would now accept payments made through eBay's PayPal service for purchases of Facebook Ads and the Facebook Credits virtual currency. Previously, Facebook Credits could only be purchased through credit cards. By adding PayPal as a payment option, Facebook will it much easier for users who live outside the US or who don't have credit cards to purchase Facebook Credits.
Facebook estimates that of its 400 million users, about 70% live outside the US. PayPal currently offers payment services online in 24 currencies with reach into 190 countries worldwide. PayPal has only 81 million active accounts, though, so Facebook will certainly need to add more payment options in the future if it wants to efficiently monetize its userbase. Last summer, Facebook was testing Zong as a mobile payment option for Credits.
This partnership seems to lay to rest the long-held theory that Facebook actually wants to use Facebook Credits to compete with PayPal as a general online payment option. In its press release, Facebook describes Facebook Credits as being explicitly intended to help users purchase virtual goods on Facebook, including in the Facebook Gift Shop and in third-party games and applications.
Facebook describes Facebook Credits as still in testing, but this month sees Credits appearing as a payment option in increasingly larger social games like FarmVille. Credits can boost conversion rates in games on the Facebook platform by as much as 25%, since users can make one-click payments when they have Credits on hand. Facebook takes a 30% cut of Credits transactions, but that kind of volume boost can still make it an attractive payment option for partners.
Join us for the App Developers Conference – October 26-27, 2011 in Santa Clara
If you enjoyed this article, please consider sharing it!
Tech Career Expo @ SXSW
Engage! is now Digital Kids
