The recent botched Facebook IPO, rising concerns about ad revenue, meeting the challenge of mobile monetization and looming privacy threats are pertinent issues that Facebook Inc. has to deal with. They are trying to find innovative solutions but there are bound to be hurdles along the way. Proposals to allow membership to under-13s have not been met with overwhelming enthusiasm, but this latest move could alter the scenario.
Facebook is now aiming to build itself as a payment platform by allowing users to make purchases in their local currency, through credit cards. The existing process of purchasing Facebook Credits in virtual currency will soon be abolished. Interestingly, the Cupertino outfit has been receiving a 30% cut from such purchases and this amounts to 15% of their total revenue.
Until now, such sales mainly dealt with virtual transactions for apps like Cityville, Farmville etc. But this update will encourage sellers and marketers to offer physical wares. In addition to gaining a channel for personalized targeting, sellers will also find it easier to acquire necessary data. A Facebook blog post defining the change reads – “By supporting pricing in local currency, we hope to simplify the purchase experience, give app developers more flexibility and make it easier to reach a global audience of Facebook users who want a way to pay for apps and games in their local currency.”
As of now there is not much to buy on Facebook, but this modification will change that. As per this TOI article, the changes are expected to take place next month and will apply to mobile devices as well.
User’s perspective: Convenience vs. Risks
Users will be able to subscribe to services that require monthly payments vis-a-vis one time payments being used so far. Moreover, users will pay in their own currency, a fact that is bound to enhance Facebook’s global appeal. While this works towards opening an interactive purchase portal for users, the fact is that Facebook will now also possess your credit card information.
Financial transactions require several layers of secure coding, so Facebook needs to implement the correct protocols. Hacking of social networks is constantly on the rise and Facebook’s large user base is a very inviting proposition for malicious parties. Identity theft and account hacking are rampant issues over Facebook and with the addition of credit card details to the mix it is further unsettling. While credit card details are required for purchasing Facebook Credits, this is a whole new ball game altogether.
Facebook is seeking revenue from sources other than advertising, but as users are you prepared to share your credit card details with them? In case of a security breach, credit card details are the finest prize, far more valuable than login passwords. Are you willing to put these details at stake for purchasing goods you can find on centralized shopping portals (in addition to in-app purchases over Facebook only) or do you think this is a wise move after all? Let us know what you think.