Blog: Facebook Payments: Trust Is Worth More than ‘Likes’

By Joe DeSetto, Emerging Payments Blogger

Two months ago, it was reported that a pilot program was running on the mobile app of men’s fashion Website JackThreads. Instead of the usual, ubiquitous PayPal payment buttons, users also had a new option—to pay using their Facebook logins. It seems The Social Network, as it was famously called in theaters a few years ago, was again was trying to extend the reach of its many million user accounts into commerce. The financial side was fairly clear—if Facebook becomes a de facto way to login on shopping carts around the world, those transactions were going to, well, finally create the revenue that stock analysts seem to believe exists already.

But why wasn’t this front-page news? Why did behemoth e-commerce leader Amazon, and oft-quoted Forrester Research and even Facebook data-sharing partner PayPal just sort of publicly shrug? Why did AllThingsD’s initial report of this pilot garner only two comments from a tech-savvy, critical audience that would seemingly jump at the chance to either pick this “experiment” apart or hail it as the next big thing?

The key to this ambivalence is that “Autofill by Facebook” as it’s called—a rather robotic, mechanical way to brand filling out payment forms with stored Facebook information—does exactly what the name implies. Think for minute how much data Facebook has that would be useful to expediting your Christmas shopping. Does Facebook have your home or work address? Maybe, but unlikely. How about your credit card? If you were, or still are, a Farmville fan, or perhaps another social game that used Facebook Credits, the answer is yes. Otherwise, why would Facebook have your credit card information?

This brings up the critical piece of the puzzle—do you trust Facebook with this information? Or is Facebook wading into an area that people just don’t want to combine with photos of family, baby updates, funny cats and that one annoying guy in your Timeline that wants to tell everyone to try the diet he’s on? It’s an interesting risk-and-reward scenario for Facebook. If it can garner trust from enough of its active users—and I specify active because millions of people, myself included, have Facebook accounts that collect dust but technically count as Facebook users—there are billions of dollars at stake.

But what if only a few million people actually trust Facebook to store their financial details? The history of the Internet is full of companies that wander too far from what they do best and take years finding a way into a new niche, such as Orkut, Google’s foray into social networking before Google Plus that is still oddly popular in Brazil but few other places.

No one goes to PayPal to post baby pictures. No one congratulates 12-year-olds for winning a soccer game on Amazon. Facebook wandering into payments could easily be as awkward, especially as users become more leery of how their information is shared between Facebook and its partner sites.

By moving its payment ambitions from the closed world of social games to the broader e-commerce market, Facebook is betting their legion of users will transition from clicking the fairly innocuous Like button to a button that requires far more trust—one labeled Buy.

Joseph DeSetto is Paybefore’s emerging payments blogger and program director of the Mobile Development Bachelor of Science degree at Full Sail University. He is the author of The Business of Design and previously served as chief technology officer for two mobile startups. If you’d like to comment on this blog post, please join the conversation on our Paybefore LinkedIn Group.