
Facebook Launches Simple Mobile Payments - sparknlaunch
http://www.readwriteweb.com/mobile/2012/06/facebook-launches-simple-mobile-payments.php
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uptown
My biggest barrier to ever using something like this is trust. Facebook has
screwed with privacy policies, and over-complicated application data-sharing
settings so many times that I can't imagine funneling money through their
platform. While I trust them with some of my personal information which has
value, there's just no trust there for me when it comes to actual money.
Psychologically, they rank below Paypal in my mind ... and that's pretty low.

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taligent
What do you think they are going to do with your money exactly ?

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uptown
For me, it's just adding an unnecessary company in the middle of a
transaction.

When I buy something, I accept that there's somebody selling something, and
frequently a credit card company facilitating that transaction. Why do I need
Facebook to know what I'm buying when purchasing things has already been made
easy-enough for most cases? With Facebook inserting themselves into the
checkout process, I'd be giving them something of value without really getting
anything for it - so why would I do it?

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akkartik
This guy totally called it: <http://blog.dinkevich.com/seriously-ads>

~~~
mtgx
Right. As if it wasn't obvious from day one of Facebook credits that they will
try something like this in the future. I'm surprised it took them this long.
Not that I plan on using it or anything - I've almost completely gave up using
my FB account.

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TomGullen
Can someone explain to me why FB chose to use credits over just actual money
balances? Is it psychologically designed to get people more willing to fritter
them in the same way it's easier to blow chips in a casino than real cash? Is
it a way to funnel multiple currencies into one global currency?

It just seems like an extra unnecessary convoluted layer to me. Having a
credit balance over real money balance is unnerving for me and would mean I
would never put too much money on at any one time, there's too much risk of
something bad happening like quick devaluation. Also it would probably be far
less liquid and harder to convert back to cash.

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KaoruAoiShiho
Generally it's to avoid credit card charges that cuts into the margins of
micro-transactions.

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pbreit
Whether the stored value is called "dollars" or "credits" would have no
bearing on credit card charges.

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jonknee
It does when there are per transaction fees. 1x $10 has a lot less fees than
10x $1.

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pyre
IIRC, most credit card fees are percentages, so the number of transactions
wouldn't matter. I've never dealt directly with it, so I'm not 100% certain
though.

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nextstep
Credit card fees are a base amount (which varies based in the auth method)
plus a percentage of the sale. So for smaller transactions, the effective
percentage is higher. Have you ever been to a store with a minimum purchase
amount for credit cards? This is why.

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pwaring
Card fees depend on how big you are though. Large UK supermarkets have no
minimum purchase amount for credit cards, because they have the clout to
negotiate a better deal. Facebook is probably big enough to do the same.

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qwar
It will be really interesting if this gets approved for the iOS app store, as
it's in flagrant violation of the "must use iTunes payments for in-app
purchases" rule. But what's Apple to do — no Facebook on iPhone? That would be
insane.

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saurik
The picture is clearly a web page: Apple has no say.

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spaghetti
Would be interesting if users could make "in-app"-purchases via the fb app by
momentarily going to mobile safari and then coming back. It's cumbersome but
gets around Apple's policies.

~~~
onions
Apple already rejects apps that switch out to mobile safari for payments.

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spaghetti
I'm curious about Square's reaction to this. It seems like people could
literally start paying with Facebook at restaurants and bars. Now the charges
are just part of the monthly phone bill instead of a monthly credit card bill.
For that matter I wonder what implications this could have for credit card
companies. Anyone know if, say, AT&T pays the same charge for accepting credit
cards as small merchants?

~~~
gzp
What FB is offering here is carrier billing.

Short term, paying with FB for physical goods (eg. in restaurants, bars) is an
unlikely outcome because carrier billing involves giving up an enormous
percentage of the transaction to the carriers.

In the U.S., carrier billing typically involves yielding a 40 - 50% margin to
the carriers. In Europe, the percentages are lower -- carrier billing is a
more mature market there -- but they still top out around 20 - 30%. In
developing markets, margins can go as high as 75 - 80%.

I don't know what sort of relationship FB has built with the carriers and what
sort of percentage merchants using the billing system will ultimately end up
with -- after all, both FB and the carriers will take a cut -- but I would be
surprised if it isn't in line with the current percentages charged for carrier
billing.

For virtual goods, carrier billing service providers claim the frictionless
nature of the transaction and the reach (6 billion mobile subscribers
globally) make up for the small margins.

Long term, of course, things could very well turn out differently.

~~~
wmf
Google also allows carrier billing in Play (theoretically; it failed when I
tried to use it), but considering that Google's whole cut is 30% they'd be
losing money on every transaction if they pay 40% to the carrier.

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donky_cong
Is there any info on how much % facebook takes ?

The biggest failure of all the 'credit' and 'mobile carrier' solutions is the
15$-50% take they deduct, making it worthless for anything but virtual goods

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jonknee
> The goal is to make it much easier to pay for in-app purchases. It is well
> known that the more steps users have to go through to verify payment
> information on a mobile device, the more likely they are to abandon that
> purchase halfway through the process.

I wonder how Apple will react to that. They're pretty keen on banning apps
that don't give them 30% of in app purchases. If Apple doesn't reject this
they will have some explaining to do.

~~~
ajross
Policies like that dissolve on this scale. It's not like some random auditor
in a cubicle in the app store division pulls up the next app to review in
their queue (hm... next is "Facebook"...) and rejects it because it has a
payment option that doesn't go through Apple's process.

What happens is that Mark calls Tim, their people meet, and a bunch of lawyers
write up a contract that the rest of us will never see.

~~~
Gustomaximus
I can confirm this having submitted a popular app that was borderline
violating itunes T&C. While we never had the honour of Steve giving us a call,
PR and product people were talking to us in the background. I expected them to
be the toughest app store to deal with but they were really quite good.

~~~
taligent
This wouldn't surprise me.

Given the small amount of money Apple makes from the store I would imagine
that user experience is a higher priority for them. It reflects very badly on
Apple if their users are able to hand over credit cards to dodgy third parties
through 'their' apps.

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adventureful
I've seen FB payments hyped to the moon lately as a revenue solution to
Facebook's advertising 'problems' - my two cents are that Facebook is going to
completely flop at mobile payments.

I don't think they can execute the product properly, from either a point of
purchase proposition or from an easy-to-use perspective. PayPal struggles with
complexity, and I believe Facebook's offering will not only be more confusing
than PayPal but more complex. The world only needs (and or will use) more
payment solutions if they're radically better, I don't see Facebook building
that product, despite the user base they can tap into.

I think Facebook is failing to fix the problems in their existing core
product, while they lurch forward into areas they have demonstrated a limited
ability to deliver on.

~~~
ashishgandhi
The gist of your comment is that you think they can only create something
that's more confusing and complex than what PayPal offers? But they already
have given a mockup of their two step simple procedure.

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sparknlaunch
> Re: virtual FB credits

I remember reading that their are some online games or communities in China
that have billion of dollars worth of their own currency in the market. It is
so large that they fix the fluctuations to the local exchange rate.

Unsure if this is the same story, but (Online) Gold Farming is estimated to be
worth $3billion. (1)

Maybe FB are looking to mimic this growth. Add in the psychological and
control aspects and you have your very own economy.

[http://news.discovery.com/tech/virtual-gold-farming-
compared...](http://news.discovery.com/tech/virtual-gold-farming-compared-
factory-110531.html)

