Facebook Testing a Transaction Service Competitive to PayPal for Mobile Purchases
Look out, PayPal: Here comes Facebook. In what seems like a rather common-sense move for the company to make, Facebook will be launching its own payments service next month, with flash-sales site JackThreads becoming the pilot partner. The service's mechanics will mimic PayPal's, where you can pay for an item online with a Facebook option. To take advantage of the service, a credit card would need to be tied to your Facebook account; there's no mention of debit cards, but that doesn't mean it won't be an option.
Since its launching over ten-years-ago, PayPal has become the dominant online payments vendor, and while its service is reliable overall, there are a lot of downsides to not having real competition. PayPal's fees, in my opinion, are rather high, and Google's Wallet service has done little to change PayPal's domination. Facebook could be PayPal's first real competitor.
Given the fact that Facebook is used almost religiously by so many people, it makes sense to believe that some might want to opt to use it for their payments online - it helps keep things neat. Plus, I'm a personal fan of using a proxy like this, rather than giving out my credit card information to every single merchant. That is the reason I stick to PayPal for virtually every online payment I need to make.
Given some of Facebook's policies though, and its insistence on having you give it as much of your info as possible, I'm not too sure I'll be quick to hand over my credit card information and use it for my online payments. But that said, I do hope that this starts a good war between it and PayPal, because competition is very good for the consumer.