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August 16, 2013 12:06 am
Facebook is testing a new mobile payment feature as it explores ways to boost revenues from advertisers by demonstrating that ads on the social network lead directly to purchases.
The feature will draw on credit card information already stored with Facebook to automatically fill in a payment information form when a person wants to buy a product via a mobile shopping app.
“The test is designed to make it easier and faster for people to make a purchase in a mobile app,” Facebook said, adding that the test was in the early stages and involved just two ecommerce partners.
The experiment comes as Facebook revealed success with advertisers in its last quarter, when it doubled revenues from ecommerce companies buying ads on the site compared to the year before.
Sheryl Sandberg, chief operating officer, said this was because the company had developed better metrics for demonstrating that Facebook ads actually led users to make purchases.
“These marketers are typically very measurement focused and they quickly increase their budgets as we deliver compelling [return on investment],” she said last month.
The ability to track purchases that originated from a Facebook ad via stored credit card information could significantly bolster the company’s attraction to ecommerce advertisers.
“Money talks,” said Rebecca Lieb, an analyst with the Altimeter Group. “There is all kinds of affinity and intent illustrated in what you like and what you’re talking about. But nothing indicates what you really like more than what you’re spending your money on.”
Advertisers could also use data about past purchases to tailor future ads.
Facebook said it hoped its feature would help ecommerce companies lower the number of purchases that were abandoned when a person did not want to go to the trouble of entering a credit card number into their phone.
The company would not reveal how many credit card numbers it had already stored, but the number is likely to be restricted to the small proportion of users who have listed their card details to buy virtual goods in social games played on Facebook.
The company generates just 12 per cent of its revenues from fees collected on those payments.
The company could face some stumbling blocks in boosting its advertising goals if privacy fears hold people back from entering sensitive payment information into social network profiles normally used for broadcasting information.
“The whole idea of ‘sharing’ is not the first word you want to associate with your credit card account number,” Ms Lieb said.
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