9 Ways Facebook Is Fueling Emerging Payments
Published August 23, 2013 2:27 PM
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Updated October 20, 2016 10:45 AM
1 Min Read
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Facebook shocked the payments industry during its IPO when it revealed it already got 15% of its revenue from payments . The social network has also proven a fertile ground to other companies that have figured out how to incorporate Facebook's platform into their own offerings. (Image: Bloomberg News)
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Gifting Gets Real
Facebook's earliest payments initiatives have involved monetizing games like Farmville and allowing users to buy digital gifts such as icons of birthday cakes . For a time, Facebook also let people buy real items such as teddy bears, but it is phasing this feature out . (Image: ThinkStock)
Wolfe, Daniel
Creating a Currency
Facebook also tried inventing its own virtual currency, Facebook Credits, which eliminated developers' need to set prices in local currencies. Facebook eventually chose to phase out this currency , instead giving developers control of how they set prices for different markets.
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Amazon, Starbucks Take Notice
Amazon.com and Starbucks have woven Facebook into their own digital payments offerings. Launched in June, Amazon Birthday Gift allows Facebook users to send virtual Amazon.com gift cards to their friends. And back in 2011, Starbucks added Facebook gifting to its popular mobile payments app. Pictured: Amazon.com CEO Jeff Bezos (Image: Bloomberg News)
Putting On the Plastic
As Facebook added gifting options, it brought in a magnetic-stripe card to make the process easier. A user of a plastic Facebook card could receive funds that can be spent at retailers such as Target, Sephora and Jamba Juice.
Network Effect
Facebook can be a huge value to companies that know how to use it. LevelUp says a meaningful part of its audience comes from Facebook referrals. "We've done the math, and our Facebook integration nets some serious wins: each offer that's shared by a LevelUp user is seen an average of 1,000 times and gets clicked on by five friends," LevelUp chief Seth Briebatsch says.
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Risk Management
Facebook profiles are proving valuable for background checks. WePay, which processes payments for small businesses, uses Facebook to vet new clients . "Most valid businesses have a digital footprint or a social media footprint," but "fraudulent accounts won't have that, or if they do it will be obviously fake," says John Canfield, WePay's vice president of risk management. (Image: ThinkStock)
Amex Gets Ambitious
American Express has multiple initiatives tied to Facebook . Its Sync and "Link, Like, Love" programs offered deals to Amex cardholders, and an agreement with Facebook game developer Zynga rewarded consumers for opening an Amex Serve digital wallet. "Our vision is to bring our business to where our customers are, and theyre on Facebook, an Amex exec said.
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Mixed Media
Online payment systems such as Chirpify , which started out on other social networks, came to embrace Facebook. Chirpify began as a payment method for Twitter and Instagram; Facebook purchased Instagram last year. (Image: ThinkStock)
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Facebook Mobile
Facebook recently began testing a system that lets consumers initiate mobile commerce payments with their Facebook login credentials. Its first test merchant is JackThreads, an online clothing vendor. (Image: Bloomberg News)
