Earlier today, we wrote about Facebook updating its terms to get ready for the roll-out of its payment system. Well guess what, it’s already here.
The application GroupCard is currently testing the new payment system live for all accounts that have it installed. I included some screenshots below. It’s very straightforward: There’s a big “Pay With Facebook” button, similar to the “Facebook Connect” buttons you see throughout the web. Next to that, there are the other options to pay with Visa, Mastercard, etc.
Clicking on the “Pay With Facebook” button pops open an overlay which asks you to confirm payment via your Facebook Credits. My $2.99 card cost me 30 Facebook Credits. Expect to see this roll out to other applications soon.
Is this available for facebook connect? Websites can start charging for stuff now.
yes, buying facebook credits, and then paying with facebook credits is sooo much more straightforward than using my amex
not yet. i’m sure you can expect that one day though.
… it’s coming on all the phishing sites of the world very soon; it will be even EARLIER than on the legitimate ones.
phishing sites have tax id numbers? huh.
Seems fb wants to give payments a “social” touch, by calling credits instead of $$s.
Facebook is used worldwide, so using “credits” makes a lot more sense than talking about “dollars” or using the $ symbol.
If you poke around in the FB Connect code that gets loaded with, say, Facebook Comments, you’ll see the Payment library is being loaded onto third-party sites. A clear indicator that this will bust out of the realm of FB’s site soon.
I may not know the details but can’t websites already charge for stuff using the likes of paypal ?
I’ve personally never found a facebook app/service worthy of renumeration ?
To what end does this serve ?
Think about content sites. Yesterday I clicked on a site to Harpers. I wanted to read the article but they wanted me to subscribe for 20 bucks a year. I would’ve gladly logged in through Facebook Connect and paid 10 cents or x amount of facebook credits to read it. Facebook has the potential to be the universal login system for the web, and because of that it can become the currency of the web.
@jjguy You comment makes me wonder if NYT or any other struggling online news source might go this route in lieu of standard CC micropayment systems.
@jjguy, @dean:
I would be willing to bet pretty much anything that Facebook, although it’s (for the most part) leading the social charge, will not become the standard channel for payment or subscriptions. I think that some companies (eg NYT, since they’re sort of desperate atm) may make use of Facebook but will by no means rely on it.
Thanks for the card MG!
You looked a little down today on the crunchcam.
sorry if this is a dumb question, but how are facebook credits earned by the consumer? Are they bought, accumulated/earned via activity on the site, both?
Too lazy to search. Anybody know how many active users PayPal has?
I wonder if facebook is on the big prize given it’s 200m users.
eyeing*
Alipay has 187 million, Qcoin has around 230 million, catch them if you can, number lovers.
So we have a currency that’s specific to Facebook (like Lindens in Second Life) at a fixed exchange rate of 1 FB credit = 10 U.S. cents. Credits expire, per the TOS. Anyone know if credit expiration violates various state gift card laws? My guess is that it does.
It does. I violates ALL the laws.
I don’t think it violates all states laws. Giftcards that expire usually say ‘except in CA.’ I know that my state of LA just a few years ago banned expiring giftcards. So there are probably some places where it’s legal.
Ugggh. They should have just used a dollar amount instead of this credits metaphor.
If I can pay for something securely using Facebook, which is linked to whatever payment method I choose, and the value is deducted in REAL dollars, fine.
Credits? I don’t need another currency to worry about. The bank of Facebook. Screw off! Do you have any idea the money the accrue in daily interest just because users haven’t doled out all their fake gifts yet.
This is dissapointing on so many levels. We’re not dumb – just call the DOLLARS.
My apologies for the typos – that’s how frustrating this is. There are so many implications here.
They do it to allow for micropayments. One facebook credit is 10¢. Say a merchant wants to price something at 5 credits or 50¢. Due to the per transaction fee Facebook is required to pay its processor it’s not economical for them to directly charge your credit card for 50¢. This is the problem the early micropayment services (Peppercoin, BitPass etc.) faced and one of the reasons why they never caught on. It’s inconvenient. Facebook may end up having the same problem.
They can still do micropayments without using facebook “credit”. it is total useless bullshit. people charging their own cards to fill their account with x amounts of credit is the same thing as them filling their account with x amount of dollars. It is just what you call it. The money is in their hands so they can handle the user to user transactions instantly after a user has loaded their account with money. instead of dollars it is being called credit. It is probably a move to make money seeing as the credit expires. They don’t want to become a bank.
It’s simple to do all that with dollars instead of credits.
While I totally agree with you and think even the concept of a second currency is dumb, it has proven successful on many platforms already. Microsoft uses it Xbox Live. It does seem sneaky however and I’m sure they make a small fortune off of un-used credits.
As to using dollars, Facebook credits will probably be used all over the world, so the concept of a dollar won’t be the same for all of us.
This is going to be huge!
….in Japan.
That’s what she said!
*sorry. Couldn’t let it go.
How do the fees compare with Paypal? Convenience & cost are huge if they’re going to compete with the already saturated market (google checkout, paypal, bill me later, Amazon Payments)
Yep, this is what I care about. I’d switch my business over today if the rates undercut Paypal’s.
saturated in countries where the full 100% of paypal works but not in some places.
you’re missing the point comparing this to paypal….
this opens the door for apps & content providers to sell their stuff for small amounts of money and not get destroyed by credit card (or paypal) transactions fees….credit cards usually charge 25cent base plus 2.5% of transaction….makes selling the single nyt article for 10cents impossible without starting a whole account or subscription system….this provides a single common currency w/o those fees that all these guys can use….
great job fb…keep it up
When can I get my Facebook credit card? Down with the dollar. Yay for currencies backed by startups
I love GroupCards! Straightforward mechanism to get “the band together” and share some group love with that special someone. Now, even more seamless to pay for the freemium service with facebook credits.
Too bad only 361 more shopping days til my birthday.
Are there any more official details on Facebook.com regarding what the process will be like for end users?
That looks like an internal test to me, it’s not out in the wild yet. GroupCard was a 2008 fbFund receiver so they are probably helping facebook test it out.
I don’t like facebook’s idea of the ‘Credit system’. Their platform applications will find ways to trick users into giving them credits in more than one ways. Why not simply make a payment solution instead?
Well I took those screenshots. And I don’t work at Facebook or for GroupCard, so you should be able to see it too.
Yes, but there was no announcement to the developers. No other developers can use it yet
btw, thanks for the pointer ; facebook is being secretive with their developers lately.
Just an outside thought – but isn’t “creating your own currency” technically illegal in many countries? I don’t know how that works with a ‘credits’ system (which I guess is more like casino chips than an actual currency) – but I think there are a few implications here that could become problematic.
they are not literally creating a currency – you can’t pay the supermarket with Credits – you have to convert it to dollars first
Quit worrying about all the legalities. It’s a waste of time and energy.
here’s some more apps with credits extra info: http://www.face...p?topic=credits
- Birthday Calendar
- Group Card
- PackRat
Anybody have any idea on what the Facebook credit coin will have on its first piece?
A shot of Mark Zuckerberg head?
Is there a way to “short” Facebook credits? LOL.
We will see know applications with payment…
very smart idea. I’ve been waiting for the idea to go mainstream… with 200 million users, everybody has a facebook account.
I think they may have just come up with a revenue model with potential.
…
Does it bother anyone that having a credit card on a facebook account is pretty scary. Thanks to hackers and the like, there are plenty of viruses on Facebook already. It was really a test for something like this to come along and allow them to access your information. The same with twitter. People were appalled when fake API sites were set up to get your log in info. The whole point is to NOT have valuable info that is easy to hack, or am I just being paranoid?
I wonder how many people will feel safe with Facebook being in possession of their credit card details and mining those transactions.
I imagine nobody will really care. Everybody I know is too stupid to look that far into it anyway…
Fuck, 2012, hurry up and kill me…
Fuck, 2012, hurry up and kill me…
+1
The only thing is, the only really useful way these points are redeemable for any developer (despite across other developer’s apps and services), is the purchasing of Fb ads (i.e. the original Facebook money-making platform that didn’t work). I’m guessing that the people that will be earning serious credits won’t be spending them on ‘gifts’.
So basically this is just a clever way of getting lots of people to pay for the product that Facebook wants you to buy now but hasn’t been as successful as they might like.
I shall be interested to see what ‘other options’ they provide. It’s still a pretty cool concept.
its a awesome way to get 200mm people to put $5 bucks into an account earning interest for Fb while they are being consumed dimes and quarters at a time
This has a lot of interesting implications, but I’m not sure they’re all positive. The advantage here lies mainly with the seller, in my opinion, enabling them to create micro transactions that bypass a typical merchant fee. For the consumer, I can’t see how paying with credits takes significantly less net time than paying with a credit card.
Also, how does one dispute charges? Is Facebook going to start handling that? I highly doubt it. PayPal devotes an enormous amount of resources to fraud prevention and handling, so I’d be curious how Facebook plans offer the same protection in a profitable manner.
On a totally different note, I realize this is likely all a part of the big picture of a connected world that Zuckerberg pitches constantly, and it sounds grand. What doesn’t sound grand, in the same way free wifi in SF from Google didn’t sound grand, is that this simply enables Facebook to get more personal information (buying habits) from which they can serve more relevant content. It’s the holy grail of marketing, but it doesn’t sit well with me.
Facebook hired Dan Levy: http://www.link...m/in/danlevyusa
I’m referring more to logistics. PayPal charge non-trivial fees for the use of their service – will Facebook start doing the same?
any gurus out there want to ponder what this does to the few turnkey ‘virtual world wallet/commerce’ companies out there like pay-by-cash, two-fish, fatfoogoo? seems like a pretty powerful blow.
consumer trust and brand cred is facebooks most precious resource to pull all of this off.
I agree with Andrew here. I like this concept, on paper anyway, but the actual implications and the infrastructure changes Facebook would need to make something like this viable, let alone workable, I just don’t know.
It’s exciting though, and as MG correctly pointed out, for a developer, this is a fantastic way to collect money.
Beginning of the end for FB.
Stupid idea using credits. It won’t catch on IMO with anything except maybe of FB apps. People don’t want to “do math” when purchasing “real” items.
I just like the fact that in there’s an up-coming competition to PayPal. Competition is good. Things like that lead to sales & cost reductions. I’m all for that!
At last FB starts the payment platform.
But let’s be clear about one thing, the only beneficiary will be FB..
Like a few other said before. It’s all about getting a high percentage of the 200M users to prepaid $5 into their FB credits account and get the interests flowing.
I don’t see the real upside for the sellers though. You won’t believe that FB will not charge you any transaction fee? Even if it will seem lower than Paypal’s, you will be charged at least twice.
First on the transaction itself, and secondly FB would be insane if they wouldn’t charge you with some sort of outpayment fee – for converting credits back to dollars.
Nevertheless, this is definitely a very good model to get FB significant cash-flow boost. If this will be a success will all depend on the acceptance of their users and here especially when it comes down to the handling of fraud issues.
All micro-payment systems out there spend an enormous amount of resources and money to detect, limit and handle fraud issues and disputes. If FB really wants to stay out of this (like shown in their TOS) I don’t think it will work out.
Almost every point you make is wrong.
Facebook couldn’t care less about “float”. It’s all about commerce-enabling Facebook.
Digital good sellers are very price-elastic since the cost of their merchandise is zero. Digital good selling platforms like ClickBank get away easily with 50% fees.
Likewise, digital good sellers don’t worry as much about fraud, especially when transactions are micro.
If you have a “sink” where credit can be translated into dollars, you’re going to get fraud.
Fraud 101: cash in some credits, move the money, and simultaneously cash out in a sink and dispute the charge with either facebook or your credit card company. You get the money on both ends.
Every single payments processor (even those dealing with virtual currencies with unsupported secondary markets) needs to deal with this issue.
I am pondering weather the advent of a “walled” FB currency means that apps like Texas Hold’em can directly use FB credits as a playing currency?
From this post it seems that an app can only post a purchase (credit) to a users wallet. If FB allows both debit & credit posts to a user’s wallet, this may open up interesting possibilities for gaming apps.
So super excited about this and along with micro payments within apps it means that there is potential for the 1000s of iPhone and Facebook apps to actually make some money as people will be able to quickly buy useful little things
Wow, I hope many would bite into this.
As someone have mentioned, facebook is already facing many bugs. If someone creates anx MONEY BUG chances are high that we can lost all our money. Don’t we?
We do NOT need another currency. Why can’t they make it as simple as paypal?
So if 30 facebook is $2.99 how many pounds is 30 FB credits? Does not make sense.
KISS!
Yes, it might make certain online merchants more accessible to users. Yes, throw in local currency handling, and you can open the doors to many users without Mastercards/Visas (like me) to spend money on the system.
But fuck me if I’m going put a single cent into an account on a system that’s continually lost money, year on year. It’s like buying tickets on the Titanic *after* it hit the iceberg.
There is no way I would have my credit card on file with Facebook. Several people saying FB has 200 mil users?? I think not I bet a good portion are not active like myself, I keep forgetting to close my account. Facebook is sooooo last year!!
I don’t get it! This is terrible! Why would I use Facebook to buy something? How do I buy Facebook credits? How many credits equal $1? With PayPal the benefits are obvious: security and convenience. Why would I go through the trouble of buying credits then buying stuff. Why not just cut out the middleman? How much of a pain in the arse is it if I am two credit short to go buy more and then come back? Hello, McFly?
I would definitely accept this as payment for 125×125 ads on http://www.worstpizza.com, I think we will see this used for advertising purchases as well!
What would have been smart was if they allowed merchants use this on their sites. Picture how many more people Facebook would connect with if you could pay for stuff on other sites. You would never log out
.
This concept has been debated in the world of academia for years, most particularly with the rapid adoption of the cellular phone. In essence, a company becomes a mild form of a banking institution. For example, when you purchase a ring-tone and it gets charged to your cellular provider account, AT&T is allowing you to purchase a product from an outside merchant. This, obviously, is on a very minute scale, however, bares a small burden of interest expense along with the possibility of non-repayment to the cellular provider. Now scale this model, you’ll begin to see how this forces the cellular provider to evolve into a credit lending institution as well, which is a whole new playing field.
I can see Facebook trending toward this model. As of now, it seems you have to purchase ‘credits’ prior to consumption, although we may see this shit in the near future.
I think the reason they went for a credit thing instead of using actual money is because a significant % of FB users are under 18. Presumably, parents/other adults will be more comfortable simply adding “credits” to their kids’ accounts than actual money.
So using credits opens up the high school demographic while (hopefully) not putting off the 18+ crowd.
My .02 cents
I was hoping Google would be the one to do something like this.
The Facebook payment system is technically nothing speacial.
Any development team could build this.
Out beta app has an e-commerce and micro payment system that works for all types of products.
It is feature rich and we give a precentage of our revenue to charity and open source projects.
Doesn’t PayPal already do this?
Great concept but relies on a closed wall offering; in the sense that, fb will need to be the place to do business for the whole web.
Paypal has the web covered in that respect, I would say that paypal needs to introduce a credible micropayment model or it will find itself floundering in the future, as for fb, they will garner first mover revenues but will find themselves in an untenable position when this payment process shows itself to be nothing more than a mania.
This is not going to be huge.
There’s no social aspect to these transactions.
So users might as well just use paypal or google checkout.
What is this Facebook you speak of?
If $2.99 is 30 credits where 1 cr=$0.10 where does $0.01 comes from to cover the difference?
this is so old story – “funny money” always failed, however we have “cool” FB here to deal with – it may pickup.
I’d love to be on the collecting end of those uncounted $0.01 from each uneven sum
Think about content sites. Yesterday I clicked on a site to Harpers. I wanted to read the article but they wanted me to subscribe for 20 bucks a year. I would’ve gladly logged in through Facebook Connect and paid 10 cents or x amount of facebook credits to read it. Facebook has the potential to be the universal login system for the web, and because of that it can become the currency of the web.
Okay, have fun with that!