4 Comments »Last Friday Techcrunch noticed an instance of Facebook’s payment platform caught in the wild. The application that payments was integrated into was the GroupCard application and integration appears pretty straight forward. As we’ve been writing over the past few weeks, payments will begin to be rolled out across a few beta applications in the near future with the final launch months down the road.
When I used Facebook’s checkout service everything appeared to run smoothly except for some of the checkout text which didn’t wrap correctly in the checkout pop-up box. I have to say that the lightbox checkout integration is pretty slick and makes checking out much easier than any of the other payment systems I use regularly. One can imagine how this service could also be easily integrated in to Facebook Connect enabled sites in the future.
So how much is this new payment platform worth to Facebook? Right now Facebook is already doing around $50 million in virtual gift sales and games on the Facebook platform are selling much more. Even if the total virtual goods economy is around $200 million currently, that would result in Facebook generating around $4 million if there were a 2 percent transaction fee. $4 million is ultimately nothing considering Facebook is forecasted to bring over $500 million in revenue this year.
The real opportunity for Facebook payments is long-term thought. If the company can generate the de facto micro-transactions payment platform then there’s a relatively significant opportunity. Still, the micro-transactions economy will have to balloon for it to become a meaningful revenue source for Facebook. Perhaps that’s why there was so much internal debate prior to the platform being released.
Regardless of the debate, it’s clear that Facebook is moving forward with their payments platform and GroupCard is the first known application to benefit from the new Facebook payments integration. Have you seen any other applications integrate with Facebook payments? Do you think payments will generate much revenue for Facebook in the long-term?
I\m very interested to see what the transaction cost will be.. There is a whole range of fees from the 30% that the iphone charges to the 2+% that is customary among credit card transactions.
Oh yes, both developers and facebook will generate huge cash in the process. As David pointed out, Apple takes 30% of the cut (which is very high, imho). Facebook offer providers like offerpalmedia charge about 15% (that’s what they say at least - have no way to check). Even that margin is quite good for facebook. This is a feature that should have already been implemented a year ago.
It is hard to say, I imagine people being very reluctant to use it at the beginning. Maybe if it is linked to Facebook Connect and makes it very easy to use, it could be possible.
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