SAN FRANCISCO: It knows who you are. It knows what you like. Now it wants to make it easier for you to buy things, in your own currency.
Facebook on Tuesday signaled its ambitions to grow as a payment platform, with changes to how its users can buy goods and services without leaving its site. It was also a clear indication to Wall Street that the company was pushing to make more money. Concerns about the company’s revenue prospects have held its shares back since its disappointing public offering last month.
Until now, Facebook has had its own virtual currency, called Facebook Credits, which is used mainly to buy virtual goods in games like FarmVille. Facebook took a 30 per cent cut from those sales, bringing in a hefty 15 per cent of total revenue last year.
The changes announced on Tuesday are meant to encourage companies beyond game developers to sell their wares on the Facebook platform itself. They could also keep Facebook users on the site longer and harness more data about what they buy.
The changes announced are twofold. First, Facebook users will be able to subscribe to services that require monthly payments. In the past, the service allowed one-time payments only. Second, users will be able to pay for things on Facebook in their own currency, rather than credits, which is vital for Facebook because it is a global network.
“By supporting pricing in local currency, we hope to simplify the purchase experience, give you more flexibility and make it easier to reach a global audience of Facebook users who want a way to pay for your apps and games in their local currency,” Facebook said in a blog post for app developers.
The new system will allow users to plug in their credit card information once and store it on Facebook, just as they could to buy Facebook Credits. But now, with one click, they will be able to buy whatever is on offer, priced in their own currency: a magazine subscription in euros, say, or games in Indian rupees.
Currently, there isn’t much to buy on Facebook, though companies such as Spotify will be able to take immediate advantage of the monthly subscriptions and seamless payments.
The changes will begin next month, the company said, and are meant to work on mobile devices as well. They are a nod to the Apple iTunes model, where users pay in dollars and cents, not a whimsical currency. And they show how Facebook is seeking more revenue from sources other than advertising.
“They are showing us we care about driving revenue, and I think that’s great,” said Michael Pachter, an equities analyst with Wedbush Securities. “That’s what investors want to see.”
New York Times News Service