Cannot tell if serious. If so: a credit card would be picked up by a tiny number of people worldwide in comparison to the numbers who would use a "pay with Facebook" button, and the latter is already an area of expertise for Facebook (or at worst a logical extension of their current expertise).
It's in a companies interest to make sure that there is a way to give them money, they are unlikely to want to throw away good customers just because they don't have a FB account.
What I would expect to see however is discounts offered if you use FB payments and allow your purchases to be automatically shared with your friends.
allow your purchases to be automatically shared with your friends.
This is one of the creepiest feature one can get. I already hate these social readers which automatically share what you read (I've stop reading stuff on FB because of that, even if many of them are of my interest). However I'm hoping they would provide some reasonable privacy options with that.
There's a large and growing number of casual users who've dealt with or watched a friend or family member deal with fraudulent charges.
I think a sufficiently streamlined phone app and pitch could net quite a few. Say, demonstrating the feature by showing someone making an Amazon purchase and then getting a phone notification to approve the charge and approving with a simple PIN entry.[1]
[1] Said notification ideally showing merchant, amount, scan location, warnings if it's a card not present transaction, etc.
> People will think twice about losing their ‘Facebook Credit Score’ over a few $ for an online presence they spent (literally) years building and cultivating.
Which keeps them from using that hypothetical service, because they don't want to risk losing the account over a transaction that went wrong.
I have both an American Express and a Visa (because Amex just isn't accepted some places). The customer service has been nothing but amazing, even when dealing fraudulent charges. And the cards are accepted everywhere.
What I'm saying is, I don't feel any need whatsoever to bypass my credit card company to pass my information off to a start up.
I really don't want that to happen. Sure, it may be a good idea for them, but I'm already tired of services that won't let me register without a Facebook account. When it comes to payment, they better have a good alternative available.
With credit cards we have a number of "hidden alternatives". We've got multiple processors, multiple card companies, etc. It's a number of layers there. With Facebook and Paypal... you're not able to pay when they say you're not able to pay (or be paid). They're not even controlled banks, so there's little you can do about some issues.
Think about all the problems when Google cut someone off and didn't provide any way of contacting them. Do you have a good way to contact Paypal, or Facebook now? (besides forms that result in canned responses) What are the incentives for changing it?
I definitely don't want it to happen either. But from Facebook's standpoint it's not a bad space to start looking at. The reasons you listed above worry me as a consumer, but unfortunately the average user isn't as scrupulous. If FB made paying for things as easy and simple as "liking" something, I'd be very surprised if it wasn't successful.
Google Wallet is actually fairly useless. To load it up you need a credit card. If you have a credit card, you could just as well, uhm, use a credit card.
I cannot talk for everyone, but I use paypal instead of Google Wallet, because it allows me to pay without using credit card.
I do think that current model of credit card payment is broken so I refuse to use it. Sure if dishonest merchant purges all my cash from credit card I could get it back by contacting bank, but money lost would be covered by all bank clients.
I don't have much trust in paypal, but I can transfer to it appropriate amount of money from bank just before the payment, so possible damage is much lower. That said my level of trust with facebook is so low that I would probably refuse to put on their account even 100 USD.
the sheer number of possible answers is overwhelming, but pretty much everything Google does fails, except for search and email. (I can't be the only one who's afraid to find out what their cars are like.) so I'm going to say the reason Google Wallet failed is because it was neither search nor email.
I guess you could say Android is only half a failure, because the constant catch-up game they're playing with Apple isn't going as badly as the constant catch-up game Google Plus (and Wave, and whatever they called the other one) plays with Facebook.
but seriously, business failure can happen for so many reasons, it doesn't really mean anything at all, unless of course you see a string of people failing at the same thing.
Wave was scraped a while ago and taken completely offline just recently. I loved the per-character live action, but the rest of the UX was non-revolutionary and mostly a disaster.
Woah.
Google Wallet failed because they didn't already have accounts for everyone when they launched it. Paypal was the only competitor but they didn't offer anything paypal didn't already offer, and everyone was already on paypal.
> pretty much everything Google does fails, except for search and email.
I can see that you're having some difficulty with google recently, but you can't actually believe this. What about Maps? Saying that maps is search because it has search built in means we can call GMail search too. What about Calendar?
> I guess you could say Android is only half a failure, because the constant catch-up game they're playing with Apple
This is where the snark starts to bother me. Let's acknowledge that Apple made a phone with a big glass touchscreen before Google. What, since then, has been a great innovation that Android has rushed to rip off?
Android half a failure? You must be joking, it's one of their greatest successes. Look around you, for sure you will see at least one person using an android phone.
And what about the ads? They were probably the first company that started making real money with them online.
Google Maps? When I want to find a place I use it, are there any other products that provide a good coverage of almost the whole world (and my little village)?
You obviously haven't had the pleasure of using 3D Secure...
I tend to always use Paypal or Google Checkout (sorry... 'Wallet'...) if given the option as I don't have to fish out my card and go through several screens of slow badly implemented web forms. Often I don't even have to enter my address whilst with a credit/debit card option I always do.
It's not a solved problem. 66% of the world does not have a bank account (much less a credit card).
However, 90% have access to a cell phone.
That was the basis for my failed micropayments project :)
It didn't fail because of a lack of demand, but because it's hard to tackle without significant resources. I still might resurrect a less ambitious version (being a middleman here in Uruguay).
No support. You NEED to be able to reach a human being to clear up problems with credit cards.
I used google wallet to pay for a google apps yearly account. I also used a different card to pay for a couple games from the android market.
I dutifully checked all the options to make sure that the card I used to pay for those games could never ever be used to pay the renewal fee on the the apps account. Then one day I found that the wrong card had been charged for the apps renewal. I couldn't get ahold of anyone at google. I couldn't find any help online. I couldn't even find a phone number to call.
So I removed the cards from my wallet account. Cancelled the wallet account, and snarl "no" anytime google tries to get a credit card from me.
Why not "Coca Cola Buy" NFC payment chip in every bottle too to be used in restaurants/bars? My mother knows the brand Coca Cola, and if Coca Cola hires 1000 engineers to provide an NFC chip in every bottle; they may get 1% from global.....
In seriousness, though, that crowding may not be bad. Competing currencies tend to drive the total value of the "winning" ones up. And I know a lot of people (myself sometimes included) that would like non-US currencies to use on a daily basis, simply for ethical or political reasons.
Plus, I played a lot of fallout and I like the idea of paying for things in caps!
I've been on FB since the beginning. And I've never clicked on an ad. What makes you think I will to actually buy something?
I barely trust Paypal, you think I'm gonna trust FB with my CC details. You gotta be kidding.
There are a few steps FB must do before I'll trust them with anything other than bs about what games I'm playing now:
1. Convince me they take my security and privacy seriously.
2. Convince me they aren't selling my personal data (statistical or not) without my permission.
3. Allow me to export (backup) ALL my data to my drive easily.
4. All me to cancel my account (not that I would). And by cancel I mean remove all my data. No questions, no sales pitches to stay - just delete everything in my profile (and off their, FB, drives). FB says they do this, But there are plenty dead folk with active profiles. Despite families begging FB to delete them.
Until all this happens, FB gets nothing from me except an occasional post about my Skyrim adventures. Oh and commenting on the latest high school gossip (the latter being funny. I mean, there's a reason I left town 25 years ago and hardly kept in touch. But here we all are, FB friends.)
You seem to conflate [1 - what I want FB to do with regards to privacy] with [2 - what FB needs to do so I trust they won't steal my money]. The two have nothing to do with each other.
Realistically speaking, 1 may never happen, 2 is already there (even if you're only liable for $50 from unauthorized cc transactions).
But you probably don't represent the average Facebook user. Most of my non-tech friends share everything - FB knows pretty much everything about them, and certainly for some of the younger ones, FB has become their primary communication platform.
For most of them, paying with Facebook would just be easier than using something else / remembering more details etc etc. And they probably trust FB more than they trust other companies with far less visibility (although most them have used their CC without any thought or concern on a load of different websites).
FWIW and personally, I completely echo your thoughts - although I'm sure I'd end up giving my CC details to FB as soon as a website that I needed to buy from offered no other method to pay than the FB one.
You might not trust FB with your CC info but elderly/non tech savy people will. Remember, there is less of us and more of them. Point is to capture a bigger market, which clearly trusts FB with their most intimate details then why not CC?
My bank limits me to 8 alphanumeric for online access. It's pretty pathetic.
On the plus side, it's shorter than any of my other common passwords, so I'm not tempted to reuse it. I can say with certainty that my banking password is not in any DB on the tubes save my bank's.
>I've been on FB since the beginning. And I've never clicked on an ad. What makes you think I will to actually buy something?
FB has several billions of revenue from ads.
What makes you think you are not an insignificant outlier and that this move or any other doesn't concern you?
Just think people, if everybody did what I do on FB, would FB still exist? If the answer is no, then what you might or might not do, doesn't matter with regards to FB.
Could you please provide a link to the report? 50% click rate is insanely high, nobody has that. It would be very interesting to know how Facebook achieved such miraculous performance.
>Could you please provide a link to the report? 50% click rate is insanely high, nobody has that. It would be very interesting to know how Facebook achieved such miraculous performance.
He is not talking about 50% click rate.
That is, he's not talking about 1 ad.
He says that 50% of FB users have clicked on ads at some point in their FB use.
Which might, or might not be true, but is not the same as "50% click rate".
Oh, you mean 50% of people that ever opened facebook have clicked on some ad at least once? Then it's not a very useful number - so suppose I clicked on some ad 5 years ago and since then never even logged in to FB - what use is to count that? I'd assume a useful number would be the number of active users regularly clicking on ads... IMHO 50% would be very high number then (unless you define regularly as "at least once in 5 years" :)
If you're talking about the report that batista referenced - I haven't seen it. 50% never clicking on an ad even once suggests that ad clickers are still a pretty extreme minority.
I'm pretty sure that I could have been counted as a clicker in that study - I'm sure I accidentally clicked on an ad at least once when I was on facebook.
Despite the fact that FB makes money off of ads, do you think people would prefer to have ads on Facebook, or to not have ads?
I think the answer is obvious: people prefer no ads. "Advertisement" is a dirty word. People want a free, ad-less product, despite the fact that it's economically unfeasible.
That's a problem. What happens when it becomes more widespread or easier to install things like adblock? What happens if a browser comes along that blocks Facebook cookies and ads by default, but still allows the basic functionality of FB? Don't say it can't happen. We're just getting to the point in society where having everything about us on someone's server is "normal". Wait until there's a disaster of some sort, a major security breach, and see how fast people change their habits. It can happen overnight.
>I think the answer is obvious: people prefer no ads. "Advertisement" is a dirty word. People want a free, ad-less product, despite the fact that it's economically unfeasible.
Well, the answer might be obvious but might not mean much. For example a similar question would be "people prefer to pay for things, or get them for free?". I think the answer would be obvious here too.
>That's a problem. What happens when it becomes more widespread or easier to install things like adblock? What happens if a browser comes along that blocks Facebook cookies and ads by default, but still allows the basic functionality of FB? Don't say it can't happen.
Then the Ad industry will turn RIAA on the users, and will lobby the government for the disallowance of things like AdBlock ("our content is a package deal, you cannot see it, and thus benefit from it, without also seeing our ads").
And it might be successful too, because they will have the support of ALL other industries -- as ads are a crucial element of over-consumption on which they thrive. By leaving it to our "needs" and "wants" only, consumption would drop very low (IIRC, they have studied the effects of a prolonged (a week?) mass media strike during the seventies, and that was the result. That was short term though, long-term should be even worse).
FB allows you to buy gift cards from stores for credits, so for an outlier that doesn't trust Facebook with cc details, there's another option. Through buying Karma, they can bring gift giving into Facebook credits, so for someone's birthday you can buy a gift card through Facebook, and you can take your phone to the store and use your gift. This has tons of potential and you can for even more through Facebook. Think of buying tickets for events, or going to a small business' store and buying an item (Etsy style). Or Etsy, Amazon, eBay, etc setting up apps where you can use Facebook credits to buy (long term). I have two cousins visiting from India, and it's amazing watching them use Facebook. They're constantly on. Using it to connect with friends, play games, etc. This is a whole market the most people don't think of. These markets are huge. And as another user pointed out, all these kids using Facebook these days are growing up with it and will continue to use it, and trust it. It's a whole different experience that we don't really see.
I've never clicked on a Facebook ad either, but I've run ads on Facebook and they got clicked a lot. The cost per new user was lower than Google Adwords.
I'm not sure it's a good idea to dismiss Facebook's chances at making money from ads yet. I've never clicked on a TV ad either, but stations make hundreds of billions of dollars from those ads every year. That industry took many decades to grow to that point though.
It's not whether Facebook makes money off the ads. We know they do. It's whether the advertisers make money from the ads that will demonstrate if there is a sustainable business model there.
>I've been on FB since the beginning. And I've never clicked on an ad. What makes you think I will to actually buy something?
I'll offer a counter anecdote. I've been impressed by their targeted ads more than once and clicked!
It has to get hyper-specific though. Not like gender-targeting, for me it read that I liked linguistics at one point in my profile and offered me an add to by a Wug shirt. I was super impressed and spent time in their online store.
I'm definitely not gonna trust FB with credit card or anything private. It is a company built on sharing, with repeated history of privacy issues. It's one thing posting there about my vacation and what I think of latest Hollywood blockbuster and quite another to give them a line to my bank account. For the latter I would rather have some company that has better privacy traditions.
Precisely. The ethos of the Facebook notion of sharing and privacy is antithetical to what a financial service needs to have.
One big reason I trust Paypal for everyday transactions is because they make money off of each transaction directly, whether through direct fees or merchant fees. I can understand their business model, and the service has a certain simplicity.
The OP wants me to give financial data to a company where my data is their product, and who is always trying to prise more "openness" from me through a byzantine privacy UI and borderline surreptitious app installations? I'll pass, thanks.
>I barely trust Paypal, you think I'm gonna trust FB with my CC details. You gotta be kidding.
Trust isn't as big of a deal as you might think. People think it matters a lot in business because it matters in your day-to-day life with in-person interactions. The fact of the matter, however, is that many people who don't trust things still use them.
I don't trust my government, but I still pay my taxes and use the clean water they pipe to my house.
I don't trust most banks, but I still use their CC processing networks.
Plenty of people don't trust BP (and oil companies in general) but still drive internal-combustion cars.
More and more people every day don't trust Foxconn, but still buy all the gadgets they produce.
Trust matters when you are dealing with something non-ubiquitous; you don't need to use it, so if you don't trust them you don't use it. However, if something goes main-stream (like credit-cards), and the interaction is practically forced on you (like taxes) then people use it without trust. Facebook as it stands right now is testament to that. I don't trust them _at all_, but am forced to use it because friends, family, and groups I personally value use it in a way that requires me to as well.
If they launch a payment processing system that even only a quarter of their users are willing to use, that is enough market share for websites to start using it, which is free advertisement for the system, gaining more users. How long before sites that _only_ take facebook pay crop up (in the same way that some sites _only_ use paypal; a company plenty of people don't trust, but are forced to use)? How long before some site that provides a service that you depend on?
1) I don't trust Facebook to transact payments quickly or safely.
2) I don't want Facebook to take my money. I'm guessing Facebook would capitalize on this by exacting a higher rate than other options. Because they can. I want the max amount of money to go to the creators of a product, not to Facebook.
3) As it says, Facebook already knows everything about people. Should they really have access to our credit cards as well?
Are online payments such a big unsolved problem?
It takes me all of 10 seconds to type my CC number and associated security codes. Sites that I use a lot tend to allow subsequent purchases without re-entering them anyway.
If everyone's facebook account has CC details attached and a 1 click "pay now" button you are only 1 XSS vulnerability from fraud on an unprecedented scale.
You usually can use a Maestro card online. I think at one point they rolled 2 different cards into the Maestro name which included one for younger people which is supposed not to work online (which would disallow FB payments as well).
In europe certainly most people would seem to have a debit card. Besides I'm assuming at the backend the FB system would require you to enter a debit/credit card.
It would seem very unwise for FB to begin taking down everyone's bank account number as in the case of fraud with a card you can simply cancel the card and get a new number.
My VISA (chip + PIN) works without any problems for online purchases. Some sites even transfer me to my bank's payment gateway that sends me an SMS with a number in order to be able to pay.
I don't have a credit card. I know a lot of people who does but rarely uses them, debit cards feel more secure than credit cards against theft/fraud (and I'm not really sure if they are, I don't think so).
Credit cards (especially in the UK) have strong legal protections for the buyer. (Section 75 of the Consumer Credit Act). Debt cards are excluded from that. So are "pre paid credit cards".
In Brazil, I do not know a single debit card that will allow international purchases, or that will be allowed in Paypal (even though Paypal has a local presence).
I don't want to waste those 10 seconds which feel like eternity trying to fill all the fields. That's why amazons "1 click" checkout button is so successful. Make me, the user, do as less work as possible.
It's frustrating how the Google Toolbar solved this problem perfectly 10 years ago, then stopped working consistently.
I should never have to type in a password, credit card number, or address if I don't want to... yet nobody except a few proprietary browser plugin vendors treats this as a problem worth solving.
One problem, though, is that banks and merchants tend to flag the credit-card field as "Never autocomplete, even if the user has explicitly requested otherwise."
Any tool that actually solves the problem, at least from my perspective, is going to have to give me the option to ignore whatever security conventions are built into the standard(s).
I think it is reasonable to demand not to autocomplete on the server side. Do they really demand not to autocomplete on the client side? In x-autocompletetype case, all CC information stays in the browser, only thing server does is to mark "this is CC field".
Opera supports this out of the box since 2003 (according to the version history). It's not perfect in my opinion, but I'd say it's not because the web is broken.
Whenever I shop on a site that has the option of typing in my credit card details vs pressing a "Pay with PayPal" button, I always go for the latter, since I'm lazy. Looking at the stats from my job, I'm definitely not alone.
That's kind of my point, Paypal , Google and Amazon all offer quick solutions to online payments. I'm not sure there is really a need for one more.
What might make more sense would be for FB to allow linking a paypal account with a FB account which could then allow users to login to Paypal via FB.
This would mean they could use paypal's more mature backend and let them deal with the messy stuff, while facebook could still potentially get all the fun of spying on your purchases.
Credit cards suck for many reasons other than just convenience of use. Credit card companies are big cartels with hefty fees to retailers, slow and unpredictable turnaround between when a payment is made, and when it gets to retailers bank, and infrastructure that's not well suited for micro payments, or peer to peer payments.
It depends if we are talking about FB simply providing a service for taking payments similar to google checkout (using existing Cards) or whether you suggest that they try to replace card altogether.
In order to do that FB would be looking at setting up massive infrastructure and essentially having a "banking division" that would get bogged down in regulations and bureaucracy.
my point is, credit cards suck, and there is plenty of space for alternatives. There is a race in peer to peer and micro-payment space, and currently paypal is the leader, but it is far from perfect. I'm not a big fan of FB, but i think this article is on point, and they are well suited to enter this space. Being able to validate identity (thanks to all the information), and having a brand and cash to back it up. As for the new division, infrastructure, and bureaucracy, it would boil down to how well they can execute.
They would most likely still have to deal with the credit card cartel in one way or another. Simply putting a nice payment front end up doesn't make VISA suck any less.
Another advantage of credit cards is the credit part and it would seem a big stretch for FB to get into the lending game.
I think how well they can execute is only one part of the puzzle, since they are going to have to deal with the governments of multiple jurisdictions and big financial institutions and will basically be at their mercy.
>Credit card companies are big cartels with hefty fees to retailers, slow and unpredictable turnaround between when a payment is made, and when it gets to retailers bank, and infrastructure that's not well suited for micro payments, or peer to peer payments.
The consumer doesn't give two flying fucks about any of this. This is a very important point.
"Ever had to buy stuff you didn't want to meet a minimum spend on cards?"
True story here. Years ago in a retail business we had a $10 minimum for credit card purchases. A customer came in and bought something for like .50c. So the counter person did the charge for $10 and refunded them $9.50 in cash.
1. I don't have any pressing need to buy a product at such a low price point, and don't see any need to do this in the future.
2. My credit card works wonderfully, and if a retailer pisses me off, I'll phone them and it'll be reversed no questions asked.
3. Again, I (and most other consumers) already have a solution to buying something online that is almost perfect from my perspective. I have three of them in my wallet sitting with me at this very moment (actually, my wallet is a bit of a problem you could look into, especially in the summer).
I don't need paypal. I don't need pretend currency. I don't trust you to get anywhere near my actual bank account. I have several security options with my credit cards that I'm comfortable with.
I personally don't really care that it costs you x amount to take my credit card as a retailer. I've already factored in all your business costs into my evaluation of the price of your product. I also don't care that your employee demanded a raise last week, you need to buy a new computer or that rent is going up. These are your problems.
Again, do you understand that as a consumer, I view my credit cards as almost the ideal product to conduct business on the internet? You're trying to fix a problem that I just don't have by providing me with a solution that I just don't need.
2. 100 keypresses per transaction[1] != 'ideal solution'
There's plenty of room for disruption in this market still. No-one's asking you to become one of those disruptors and we won't be taking away your credit card. You can keep it. Just like all those people who prefer cash to credit cards can keep their cash.
[1] Card number, SSN, expiration date, address, address line 2, City, County, Postcode. Maybe emailaddress, telephone number. Roughly 100 key presses to enter that lot
At least in the US, every major credit card has rules against minimum transactions. Reporting a minimum transaction requirement will cause the CC company to investigate the retailer and possibly punish them.
Many small businesses still do it, of course. What keeps people from reporting them is a mixture of not knowing the regulations and wanting the small business to stay afloat. But regardless, minimum payments actually are put in place by the business.
And as a someone selling something by credit card all over the world (stopped counting at 50 countries about 12 years ago) I also don't give two ff's about any of this.
Sure occasionally we get hit with a chargeback ($30 plus the charge amount) and sure we are powerless and they just added some arbitrary $7 month fee. But without this entire system I wouldn't be in business. I also operated a retail business years ago and accepted credit cards. It was a tremendous improvement over having to extend credit to a business owner and then collecting. The fees were well worth the trouble saved.
Almost every time I use my ccard I get redirected to my bank's website where I have to login. This involves entering two fixed digits (long and tough to remember) and a third token using using a little calculator like device which they supplied me, for which I also need my bank card and its pincode. Once I've passed this step I have to generate another one time token using this little device.
If I want to use my ccard online, away from home I need to have all kinds of codes remembered or written down, my normal bank card and this little device.
Using my ccard online has become quite the pain in the ass.
It may be different for people who have to remember many credit card numbers.
For example I know my personal CC number off my head but not any of the cards I use for business.
It would be very convenient for someone, somewhere, to establish a widely accepted micropayment system for the Internet.
I sure can just whip out the CC, type in the 16 things, the special code, the expiration date, maybe a second screen the CC vendor presents to get my address or phone number for additional verification...
But I would never bother for a 3 or 5 cent article. And I firmly believe that's why there is no way to pay 3 or 5 cents for a view of something.
But there is a lot of cool stuff we could make or do with this. It should just be easy. Why doesn't it exist? There might be a big business answer that my fellows and myself don't get as we rant over coffee.
Micropayments haven't taken off because people don't want to pay 3 to 5 cents for anything. The perception of value is so low that even a one-button form is too much friction in the user experience.
If your article is only worth 3 cents, just show it to me for free and put an ad on the page.
The decision to buy can definitely be irrational, but that can cut both ways. Buyers might decide against purchasing even when the product is clearly affordable.
Consider the Facebook social reader apps like the Washington Post. If you click through from your Facebook news feed, you need to authorize the app to read the article. It's a one-button form, it's totally free, and you could revoke the app whenever you want. And yet, a huge percentage of people cancel out of it.
Would I pay 5 cents to read a NYTimes article from Hacker News? Maybe yes, maybe no, depends on the article. The point is that I would be forced into my "purchase mindset" every time.
I do. I believe the fundamental issue is one of user experience. I think if you force the user to make an affirmative decision to pay every time they want to read an article, a huge number will not bother, even if the cost is negligible. Especially since there will probably be 5 other news sources who are "summarizing" the same content for free, with ads.
The second biggest social network in The Netherlands (Hyves) introduced something like this in 2010. They mainly intended it to be used to pay back (small) debts to friends or relatives, but also made partnerships that enabled you to order food online or order drinks at a bar.
As far as I know, it did not really lift off, but this could be because Facebook overtook Hyves as the most popular social network shortly afterwards.
Facebook don't have 1 billion customers. They have 1 billion users. If you don't pay for something (Facebook) you are not a customer, you are the product.
I think that "be a payment provider" is a much easier thing to think than it is to do.
While it may be easy to build the customer side of the equation you've got to build a vast network of merchants willing to accept payment and that's hard work. Especially if you're trying to convince them to re-price in Facebook Credits?
Sure, you could charge 1% but people have added credits to their Facebook account at some point and it probably cost you more than 1% to allow them to do that. How do people buy credits right now? All those cost Facebook more than 1%, right? I buy $100 of credits, it costs F8 a couple of bucks, I then spend $100 of credits and they recoup $1 of it in merchant fees? Doesn't sound like a good business model.
Beyond the need to create a financial model that makes sense and then go out to find merchants and convince them there's a massive risk of merchant fraud.
Fraudulent merchant X signs up for a F8 Merchant Account. Fraudulent customers A, B, C buy something with stolen credit cards for $100 each. Everyone disappears after merchant X receives settlement. F8 is out of pocket to the tune of the original $300, another $300 in reversals to their bank and then $30-$60 of chargeback fees. If that happens enough then F8 might even have its merchant account revoked... though they're probably big enough to avoid that.
It's an excellent money laundering channel too and there's a lot of financial regulation to navigate around that.
I know that this stuff can be overcome but it is hard to do and would be a major piece of work. This type of thing nearly sank PayPal back in the day.
There are reasons for and against pursuing this particular niche, but I think Boris is really onto something. Selling ads is a safe bet, but FB really could wager a billion dollar fee to enter a new market. There must be markets where entering the field with a billion signed up users and a billion in capital will work, even if this isn't the perfect example.
Well there's interesting ways to do that with Facebook though. A la you can't start selling large amounts of goods unless you have x number of likes on your page. Same thing, on the user side. You can only buy $10 worth of credits if you have a new account, accounts can be flagged, etc. I agree it's a pain in the ass to do, and much easier said than done. But it's definitely doable and hugely profitable. They can easily take more than $1 in merchant fees, and credit card companies will beg them for their business and give them great rates. Shoot, they can do a Visa or Mastercard exclusive and get even better rates at the beginning.
I fully agree. For a lot of people facebook is their identity, linking their identity to paiement is a logical step.
They could first allow people to exchange any amount of money with friends for free, add it to their mobile app so that everyone has it anytime. Other apps are doing that, and that's very useful.
And they should buy Stripe, bind everything together, displace amex, visa and mastercard.
Or may be that's the plan, but it's best to be silent ?
Why not buying RIM and make a serious move into the smartphone market. Last time I checked RIM's market capitalization is a bit over $5bn and Facebook has tons of money in their pockets after the IPO.
It's worked well for Walmart (well, okay, aside from the whole "bribing people in Mexico" thing.) But people seem willing, and even eager, to bank with companies they know and trust.
The real problem is regulation. It is so, so much easier to sell ads than to navigate the international financial markets.
There is no way facebook has a billion active users. Official numbers are always very optimistic.
For example, a lot of brands and agencies register many,many pages on facebook, and even post content there. And Britney Spears is not really on Facebook, she just has someone have post stuff for her.
I'm sure Facebook is huge. But if they say a billion, it is probably closer to 500m.
This thread is interesting in that some people are arguing they wouldn't trust Facebook with their cc. To me this makes no sense as the likelihood of fb doing anything funky with your cc details once obtained seems highly unlikely.
If something does go wrong cc have very good insurance on them. The problem does seem to be a general resentment and paranoia of large companies. I dont think fb are going to cook up a half baked solution for anything like this, there's every likelihood they will do it as securely as the next especially with the strict laws and regulations around implementing such systems.
Everyone with a cc has probably used it in far less secure environments than fb could ever be, for example pubs, bars, resteraunts, independent shops etc.
If fb did a payment system it would annoy me briefly as another payment system I'd inevitably have to register with at some point but that's realistically as far as the problems would go.
It's not about FB deliberately doing something funky with it - it's about one of the million and one apps that have requested access to your FB account at some point doing something funky with it. You may trust them to do it as securely as the next person, but at least partly based on their past reputation around privacy, I don't.
This thread is interesting in that some people are arguing they wouldn't trust Facebook with their cc. To me this makes no sense as the likelihood of fb doing anything funky with your cc details once obtained seems highly unlikely.
If something does go wrong cc have very good insurance on them. The problem does seem to be a general resentment and paranoia of large companies. I dont think fb are going to cook up a half baked solution for anything like this, there's every likelihood they will do it as securely as the next especially with the strict laws and regulations around implementing such systems.
Everyone with a cc has probably used it in far less secure environments than fb could ever be, for example pubs, bars, resteraunts, independent shops etc.
If fb did a payment system it would annoy me briefly as another payment system I'd inevitably have to register with at some point but that's realistically as far as the problems would go.
Facebook has demonstrated a completely utter disdain for interacting with their users. If something goes wrong with your "friend wall" or whatever, it's an inconvenience. If something goes wrong with your money, you want to talk to a human. Everyone knows you can't reach fb humans. When it's money, that matters. The work involved in turning that perception around is a huge hurdle to this idea.
The whole approach of Facebook at its core is a disdain for the users, because Facebook profits from users' profiles. They can argue that users are willing to trade off their privacy for the "free" service, but it's just a sneaky way to get users information to monetize on. Given that, why do you think they should have more respect in other kind of interactions?
There are lots of reasons they /should/ have more respect. But my whole point was that I don't think they ever /will/. Putting a high touch endeavor like financial dealings on top of a no touch venture like a social network is dumb. Basically, looks like you and I agree.
Yes, we agree. Really Facebook is not fitting to be a social network, but at the same time it has such a huge number of users at the moment. Hopefully real social networks like Diaspora which are built for social interactions and not for ripping users off on their privacy, will eventually gain more traction.
228 comments
[ 2.2 ms ] story [ 280 ms ] threadAnd then Facebook would know everything I buy.
What I would expect to see however is discounts offered if you use FB payments and allow your purchases to be automatically shared with your friends.
You would get something like "10% off for you and 5% off for all of your friends, if you allow us to repost on your wall"
The problem of course becomes spam, if FB ever gets to such a poor signal/noise ratio then people will simply stop using it.
Facebook has scared off a lot of the "moms" out there by their bad bad bad privacy history. Do you really want to pay for things using their service?
They probably should already.
I think a sufficiently streamlined phone app and pitch could net quite a few. Say, demonstrating the feature by showing someone making an Amazon purchase and then getting a phone notification to approve the charge and approving with a simple PIN entry.[1]
[1] Said notification ideally showing merchant, amount, scan location, warnings if it's a card not present transaction, etc.
Which keeps them from using that hypothetical service, because they don't want to risk losing the account over a transaction that went wrong.
Or maybe not. Who knows?
It would definitely be the next step in user lock-in, but you'd start competing with banks and everyone else who offers a way to pay.
Now, I wouldn't complain if they bought some "bypass the credit card companies" service like Dwolla...
I have both an American Express and a Visa (because Amex just isn't accepted some places). The customer service has been nothing but amazing, even when dealing fraudulent charges. And the cards are accepted everywhere.
What I'm saying is, I don't feel any need whatsoever to bypass my credit card company to pass my information off to a start up.
With credit cards we have a number of "hidden alternatives". We've got multiple processors, multiple card companies, etc. It's a number of layers there. With Facebook and Paypal... you're not able to pay when they say you're not able to pay (or be paid). They're not even controlled banks, so there's little you can do about some issues.
Think about all the problems when Google cut someone off and didn't provide any way of contacting them. Do you have a good way to contact Paypal, or Facebook now? (besides forms that result in canned responses) What are the incentives for changing it?
I guess you could say Android is only half a failure, because the constant catch-up game they're playing with Apple isn't going as badly as the constant catch-up game Google Plus (and Wave, and whatever they called the other one) plays with Facebook.
but seriously, business failure can happen for so many reasons, it doesn't really mean anything at all, unless of course you see a string of people failing at the same thing.
> pretty much everything Google does fails, except for search and email.
I can see that you're having some difficulty with google recently, but you can't actually believe this. What about Maps? Saying that maps is search because it has search built in means we can call GMail search too. What about Calendar?
> I guess you could say Android is only half a failure, because the constant catch-up game they're playing with Apple
This is where the snark starts to bother me. Let's acknowledge that Apple made a phone with a big glass touchscreen before Google. What, since then, has been a great innovation that Android has rushed to rip off?
AdSense? Youtube?
Also, Google Reader is the leader in its (admittedly small) space. And I'm pretty sure so is Google News. Oh, and Google Maps.
And what about the ads? They were probably the first company that started making real money with them online.
Google Maps? When I want to find a place I use it, are there any other products that provide a good coverage of almost the whole world (and my little village)?
It works, it's easy enough, and I'm not sure I want it to be any easier.
I tend to always use Paypal or Google Checkout (sorry... 'Wallet'...) if given the option as I don't have to fish out my card and go through several screens of slow badly implemented web forms. Often I don't even have to enter my address whilst with a credit/debit card option I always do.
However, 90% have access to a cell phone.
That was the basis for my failed micropayments project :)
It didn't fail because of a lack of demand, but because it's hard to tackle without significant resources. I still might resurrect a less ambitious version (being a middleman here in Uruguay).
No support. You NEED to be able to reach a human being to clear up problems with credit cards.
I used google wallet to pay for a google apps yearly account. I also used a different card to pay for a couple games from the android market.
I dutifully checked all the options to make sure that the card I used to pay for those games could never ever be used to pay the renewal fee on the the apps account. Then one day I found that the wrong card had been charged for the apps renewal. I couldn't get ahold of anyone at google. I couldn't find any help online. I couldn't even find a phone number to call.
So I removed the cards from my wallet account. Cancelled the wallet account, and snarl "no" anytime google tries to get a credit card from me.
cf. http://en.wikipedia.org/wiki/Irony_punctuation
Yay! Unicode! Encoding! Fun!
I personally wouldn't want to use a system for payment that would only work for one brand.
Plus, I played a lot of fallout and I like the idea of paying for things in caps!
I barely trust Paypal, you think I'm gonna trust FB with my CC details. You gotta be kidding.
There are a few steps FB must do before I'll trust them with anything other than bs about what games I'm playing now:
1. Convince me they take my security and privacy seriously. 2. Convince me they aren't selling my personal data (statistical or not) without my permission. 3. Allow me to export (backup) ALL my data to my drive easily. 4. All me to cancel my account (not that I would). And by cancel I mean remove all my data. No questions, no sales pitches to stay - just delete everything in my profile (and off their, FB, drives). FB says they do this, But there are plenty dead folk with active profiles. Despite families begging FB to delete them.
Until all this happens, FB gets nothing from me except an occasional post about my Skyrim adventures. Oh and commenting on the latest high school gossip (the latter being funny. I mean, there's a reason I left town 25 years ago and hardly kept in touch. But here we all are, FB friends.)
Realistically speaking, 1 may never happen, 2 is already there (even if you're only liable for $50 from unauthorized cc transactions).
For most of them, paying with Facebook would just be easier than using something else / remembering more details etc etc. And they probably trust FB more than they trust other companies with far less visibility (although most them have used their CC without any thought or concern on a load of different websites).
FWIW and personally, I completely echo your thoughts - although I'm sure I'd end up giving my CC details to FB as soon as a website that I needed to buy from offered no other method to pay than the FB one.
On the plus side, it's shorter than any of my other common passwords, so I'm not tempted to reuse it. I can say with certainty that my banking password is not in any DB on the tubes save my bank's.
FB has several billions of revenue from ads.
What makes you think you are not an insignificant outlier and that this move or any other doesn't concern you?
Just think people, if everybody did what I do on FB, would FB still exist? If the answer is no, then what you might or might not do, doesn't matter with regards to FB.
He is not talking about 50% click rate.
That is, he's not talking about 1 ad.
He says that 50% of FB users have clicked on ads at some point in their FB use.
Which might, or might not be true, but is not the same as "50% click rate".
I'm pretty sure that I could have been counted as a clicker in that study - I'm sure I accidentally clicked on an ad at least once when I was on facebook.
I think the answer is obvious: people prefer no ads. "Advertisement" is a dirty word. People want a free, ad-less product, despite the fact that it's economically unfeasible.
That's a problem. What happens when it becomes more widespread or easier to install things like adblock? What happens if a browser comes along that blocks Facebook cookies and ads by default, but still allows the basic functionality of FB? Don't say it can't happen. We're just getting to the point in society where having everything about us on someone's server is "normal". Wait until there's a disaster of some sort, a major security breach, and see how fast people change their habits. It can happen overnight.
Well, the answer might be obvious but might not mean much. For example a similar question would be "people prefer to pay for things, or get them for free?". I think the answer would be obvious here too.
>That's a problem. What happens when it becomes more widespread or easier to install things like adblock? What happens if a browser comes along that blocks Facebook cookies and ads by default, but still allows the basic functionality of FB? Don't say it can't happen.
Then the Ad industry will turn RIAA on the users, and will lobby the government for the disallowance of things like AdBlock ("our content is a package deal, you cannot see it, and thus benefit from it, without also seeing our ads").
And it might be successful too, because they will have the support of ALL other industries -- as ads are a crucial element of over-consumption on which they thrive. By leaving it to our "needs" and "wants" only, consumption would drop very low (IIRC, they have studied the effects of a prolonged (a week?) mass media strike during the seventies, and that was the result. That was short term though, long-term should be even worse).
So far I haven't seen statistics or proof to indicate that advertising on Facebook is effective, although I've heard anecdotes to the contrary.
If advertising on Facebook proves to be ineffective, then they are in big trouble.
I'm not sure it's a good idea to dismiss Facebook's chances at making money from ads yet. I've never clicked on a TV ad either, but stations make hundreds of billions of dollars from those ads every year. That industry took many decades to grow to that point though.
I'll offer a counter anecdote. I've been impressed by their targeted ads more than once and clicked!
It has to get hyper-specific though. Not like gender-targeting, for me it read that I liked linguistics at one point in my profile and offered me an add to by a Wug shirt. I was super impressed and spent time in their online store.
One big reason I trust Paypal for everyday transactions is because they make money off of each transaction directly, whether through direct fees or merchant fees. I can understand their business model, and the service has a certain simplicity.
The OP wants me to give financial data to a company where my data is their product, and who is always trying to prise more "openness" from me through a byzantine privacy UI and borderline surreptitious app installations? I'll pass, thanks.
Trust isn't as big of a deal as you might think. People think it matters a lot in business because it matters in your day-to-day life with in-person interactions. The fact of the matter, however, is that many people who don't trust things still use them.
I don't trust my government, but I still pay my taxes and use the clean water they pipe to my house. I don't trust most banks, but I still use their CC processing networks. Plenty of people don't trust BP (and oil companies in general) but still drive internal-combustion cars. More and more people every day don't trust Foxconn, but still buy all the gadgets they produce.
Trust matters when you are dealing with something non-ubiquitous; you don't need to use it, so if you don't trust them you don't use it. However, if something goes main-stream (like credit-cards), and the interaction is practically forced on you (like taxes) then people use it without trust. Facebook as it stands right now is testament to that. I don't trust them _at all_, but am forced to use it because friends, family, and groups I personally value use it in a way that requires me to as well.
If they launch a payment processing system that even only a quarter of their users are willing to use, that is enough market share for websites to start using it, which is free advertisement for the system, gaining more users. How long before sites that _only_ take facebook pay crop up (in the same way that some sites _only_ use paypal; a company plenty of people don't trust, but are forced to use)? How long before some site that provides a service that you depend on?
1) I don't trust Facebook to transact payments quickly or safely.
2) I don't want Facebook to take my money. I'm guessing Facebook would capitalize on this by exacting a higher rate than other options. Because they can. I want the max amount of money to go to the creators of a product, not to Facebook.
3) As it says, Facebook already knows everything about people. Should they really have access to our credit cards as well?
If everyone's facebook account has CC details attached and a 1 click "pay now" button you are only 1 XSS vulnerability from fraud on an unprecedented scale.
In europe certainly most people would seem to have a debit card. Besides I'm assuming at the backend the FB system would require you to enter a debit/credit card.
It would seem very unwise for FB to begin taking down everyone's bank account number as in the case of fraud with a card you can simply cancel the card and get a new number.
I don't have a credit card. I know a lot of people who does but rarely uses them, debit cards feel more secure than credit cards against theft/fraud (and I'm not really sure if they are, I don't think so).
Visa is a credit card, however. In Europe, it's often tacked onto a regular debit card, but it's a separate thing not everyone has.
In Brazil, I do not know a single debit card that will allow international purchases, or that will be allowed in Paypal (even though Paypal has a local presence).
I should never have to type in a password, credit card number, or address if I don't want to... yet nobody except a few proprietary browser plugin vendors treats this as a problem worth solving.
http://wiki.whatwg.org/wiki/Autocomplete_Types
Any tool that actually solves the problem, at least from my perspective, is going to have to give me the option to ignore whatever security conventions are built into the standard(s).
http://help.opera.com/Linux/11.00/en/wand.html
What might make more sense would be for FB to allow linking a paypal account with a FB account which could then allow users to login to Paypal via FB.
This would mean they could use paypal's more mature backend and let them deal with the messy stuff, while facebook could still potentially get all the fun of spying on your purchases.
http://www.wired.com/magazine/2010/02/ff_futureofmoney/all/1
In order to do that FB would be looking at setting up massive infrastructure and essentially having a "banking division" that would get bogged down in regulations and bureaucracy.
Another advantage of credit cards is the credit part and it would seem a big stretch for FB to get into the lending game.
I think how well they can execute is only one part of the puzzle, since they are going to have to deal with the governments of multiple jurisdictions and big financial institutions and will basically be at their mercy.
The consumer doesn't give two flying fucks about any of this. This is a very important point.
Ever had to buy stuff you didn't want to meet a minimum spend on cards? Cause over here many shops have a minimum of £5. And this is why.
Oh yes, the consumer cares, they just blame the shop owner instead of the cartels.
True story here. Years ago in a retail business we had a $10 minimum for credit card purchases. A customer came in and bought something for like .50c. So the counter person did the charge for $10 and refunded them $9.50 in cash.
On the internet? No.
Now you know what we're all talking about and can start giving a flying fuck!
1. I don't have any pressing need to buy a product at such a low price point, and don't see any need to do this in the future.
2. My credit card works wonderfully, and if a retailer pisses me off, I'll phone them and it'll be reversed no questions asked.
3. Again, I (and most other consumers) already have a solution to buying something online that is almost perfect from my perspective. I have three of them in my wallet sitting with me at this very moment (actually, my wallet is a bit of a problem you could look into, especially in the summer).
I don't need paypal. I don't need pretend currency. I don't trust you to get anywhere near my actual bank account. I have several security options with my credit cards that I'm comfortable with.
I personally don't really care that it costs you x amount to take my credit card as a retailer. I've already factored in all your business costs into my evaluation of the price of your product. I also don't care that your employee demanded a raise last week, you need to buy a new computer or that rent is going up. These are your problems.
Again, do you understand that as a consumer, I view my credit cards as almost the ideal product to conduct business on the internet? You're trying to fix a problem that I just don't have by providing me with a solution that I just don't need.
So you're making two mistakes:
1. you != everyone else
2. 100 keypresses per transaction[1] != 'ideal solution'
There's plenty of room for disruption in this market still. No-one's asking you to become one of those disruptors and we won't be taking away your credit card. You can keep it. Just like all those people who prefer cash to credit cards can keep their cash.
[1] Card number, SSN, expiration date, address, address line 2, City, County, Postcode. Maybe emailaddress, telephone number. Roughly 100 key presses to enter that lot
Many small businesses still do it, of course. What keeps people from reporting them is a mixture of not knowing the regulations and wanting the small business to stay afloat. But regardless, minimum payments actually are put in place by the business.
Minimums are now allowed on CC
Sure occasionally we get hit with a chargeback ($30 plus the charge amount) and sure we are powerless and they just added some arbitrary $7 month fee. But without this entire system I wouldn't be in business. I also operated a retail business years ago and accepted credit cards. It was a tremendous improvement over having to extend credit to a business owner and then collecting. The fees were well worth the trouble saved.
If I want to use my ccard online, away from home I need to have all kinds of codes remembered or written down, my normal bank card and this little device.
Using my ccard online has become quite the pain in the ass.
I sure can just whip out the CC, type in the 16 things, the special code, the expiration date, maybe a second screen the CC vendor presents to get my address or phone number for additional verification...
But I would never bother for a 3 or 5 cent article. And I firmly believe that's why there is no way to pay 3 or 5 cents for a view of something.
But there is a lot of cool stuff we could make or do with this. It should just be easy. Why doesn't it exist? There might be a big business answer that my fellows and myself don't get as we rant over coffee.
If your article is only worth 3 cents, just show it to me for free and put an ad on the page.
The question is, the NYTimes article linked on HN with 120 comments... would you pay 5cents to read it?
Consider the Facebook social reader apps like the Washington Post. If you click through from your Facebook news feed, you need to authorize the app to read the article. It's a one-button form, it's totally free, and you could revoke the app whenever you want. And yet, a huge percentage of people cancel out of it.
Would I pay 5 cents to read a NYTimes article from Hacker News? Maybe yes, maybe no, depends on the article. The point is that I would be forced into my "purchase mindset" every time.
Google Adsense fills that niche. People who run a website get money from teeny little clicks that their vistors do.
As far as I know, it did not really lift off, but this could be because Facebook overtook Hyves as the most popular social network shortly afterwards.
Facebook: ~ 1 billion customers
Visa: ~2 billion cards out there.
Facebook: ? merchants.
Visa: > 10 million merchants.
Facebook: potentially disruptive to the existing market
Visa: 50+ years experience with electronics payments processing, fraud detection, government relations and consumer credit marketing
Facebooks main competitive advantage is(was?) relatively cheap capital.
http://corporate.visa.com/_media/visa-fact-sheet.pdf
Edit: Corrected years, added reference
While it may be easy to build the customer side of the equation you've got to build a vast network of merchants willing to accept payment and that's hard work. Especially if you're trying to convince them to re-price in Facebook Credits?
Sure, you could charge 1% but people have added credits to their Facebook account at some point and it probably cost you more than 1% to allow them to do that. How do people buy credits right now? All those cost Facebook more than 1%, right? I buy $100 of credits, it costs F8 a couple of bucks, I then spend $100 of credits and they recoup $1 of it in merchant fees? Doesn't sound like a good business model.
Beyond the need to create a financial model that makes sense and then go out to find merchants and convince them there's a massive risk of merchant fraud.
Fraudulent merchant X signs up for a F8 Merchant Account. Fraudulent customers A, B, C buy something with stolen credit cards for $100 each. Everyone disappears after merchant X receives settlement. F8 is out of pocket to the tune of the original $300, another $300 in reversals to their bank and then $30-$60 of chargeback fees. If that happens enough then F8 might even have its merchant account revoked... though they're probably big enough to avoid that.
It's an excellent money laundering channel too and there's a lot of financial regulation to navigate around that.
I know that this stuff can be overcome but it is hard to do and would be a major piece of work. This type of thing nearly sank PayPal back in the day.
Perhaps I'm missing the point here though?
They could first allow people to exchange any amount of money with friends for free, add it to their mobile app so that everyone has it anytime. Other apps are doing that, and that's very useful.
And they should buy Stripe, bind everything together, displace amex, visa and mastercard.
Or may be that's the plan, but it's best to be silent ?
They have a good place to do that, but I doubt that they'll go that way.
But Steve isn't there, and Apple moves might be unexpected.
The real problem is regulation. It is so, so much easier to sell ads than to navigate the international financial markets.
Nerds and Geeks never trust facebook, but their moms and sisters do !
For example, a lot of brands and agencies register many,many pages on facebook, and even post content there. And Britney Spears is not really on Facebook, she just has someone have post stuff for her.
I'm sure Facebook is huge. But if they say a billion, it is probably closer to 500m.
Not really viable on the desktop, but certainly on phones.
There's no reason that I can think of why I can't be identified by my own mobile network and either charged at the end of the month or via my airtime.
If something does go wrong cc have very good insurance on them. The problem does seem to be a general resentment and paranoia of large companies. I dont think fb are going to cook up a half baked solution for anything like this, there's every likelihood they will do it as securely as the next especially with the strict laws and regulations around implementing such systems.
Everyone with a cc has probably used it in far less secure environments than fb could ever be, for example pubs, bars, resteraunts, independent shops etc.
If fb did a payment system it would annoy me briefly as another payment system I'd inevitably have to register with at some point but that's realistically as far as the problems would go.
If something does go wrong cc have very good insurance on them. The problem does seem to be a general resentment and paranoia of large companies. I dont think fb are going to cook up a half baked solution for anything like this, there's every likelihood they will do it as securely as the next especially with the strict laws and regulations around implementing such systems.
Everyone with a cc has probably used it in far less secure environments than fb could ever be, for example pubs, bars, resteraunts, independent shops etc.
If fb did a payment system it would annoy me briefly as another payment system I'd inevitably have to register with at some point but that's realistically as far as the problems would go.