Facebook (Nasdaq: FB), owner of the world’s most popular social-networking website, is testing a feature that lets users link their payment information to other mobile applications as it seeks to simplify e-commerce for members.
The program allows users to place payment data on file with Facebook into a checkout form on partner mobile apps, the company said in an e-mailed statement. The system enables the application’s own payment processor to complete the transaction, not Facebook. The test will start with one or two partners, including men’s retailer JackThreads.
Facebook, based in Menlo Park, California, is rolling out features that make it more efficient for its 1.15 billion users to make online purchases as it searches for new ways to attract members and keep them engaged. Last year, the company unveiled a gift-giving service that lets people buy and send items to friends without leaving the site.
The new service would use payment information that shoppers store on Facebook to automatically complete checkout forms of certain mobile apps. Then, the app would process the purchase.
Spokeswoman Tera Randall said in an e-mailed statement that Facebook has a “great relationship with PayPal, and this product is simply to test how we can help our app partners provide a more simple commerce experience.”
The test, she added, won’t involve moving payment processing “away from an app’s current payments provider, such as PayPal.”
Nonetheless, shares of PayPal’s owner, eBay Inc. declined on news of the potential competition. The stock closed down $1.05, or 1.9 percent, at $53.18.
Facebook’s stock closed down 9 cents at $36.56.
Forrester Research analyst Denee Carrington thinks Facebook will face a challenge in offering mobile payments even though the company has been building up its database of users’ credit cards.
“Consumers want safe, seamless and convenient mobile payments and there are a growing number of competitors that consumers trust more — such as PayPal, Visa (V.me) and others,” Carrington said in an e-mailed statement.
