Facebook appears to be readying the next phase of its application platform – a payments system that would allow application developers to conduct transactions through the Facebook site, according to a announcement unearthed on Tuesday by Valleywag.
When he launched the Facebook platform strategy in May, Mark Zuckerberg, Facebook’s founder, hinted that some kind of payment system could be in the works. Such a system would expand the revenue streams available to application writers by allowing them to charge users for premium services, or even sell items through Facebook outright, rather than relying on advertising to make money. Facebook could also benefit if it worked out a way to pocket a piece of each transaction run over its payments system.
Facebook faces an interesting choice in deciding how to proceed. It can go it alone, partner with a company with more experience in online payments (Ebay’s PayPal springs to mind), or offer a mix of payment options. Working with an experienced partner could soothe the nerves of users concerned about privacy in the wake of Facebook’s poor handling of its new Beacon advertising service.
Still, Mr Zuckerberg is nothing if not ambitious. If he sees an opportunity to create and dominate a huge new online marketplace on his own, he may well take it. Facebook itself is not completely lacking in payments experience: It already features a "gift shop" where users can pay to send each other $1 electronic knick-knacks. This service could easily form the basis of a broader payments push.
Partner or not, if done well, a Facebook payments service could open up a world of new possiblities as established online vendors begin to conduct business not just through their own web sites, but through proxy sites on Facebook.
