real-time news and commentary for investors
Thursday, Aug 15
Facebook working on PayPal rival; eBay shares slide
- Facebook (FB +0.4%) confirms to AllThingsD it's testing an online payments product. A launch is expected in the next month or so.
- Sources state the product, set to compete against 800-lb. gorilla PayPal (EBAY -2.4%), will "allow online shoppers to make purchases on mobile apps using their Facebook login information," and (like PayPal) will allow them to avoid having to constantly re-enter their billing info.
- However, for now, the test is focused on simply "creating a better mobile checkout experience," and doesn't tie in payment-processing (as PayPal does).
- Facebook already handles payments for in-app game purchases and its Gifts product (among other things), and the enormous reach of its social sharing tools could allow it to quickly reel in many 3rd-party apps and (if it chooses to expand further) Web sites.
- But PayPal has stared down competition from Internet giants before, and the network effects stemming from its 132M active users and many thousands of merchant partners make it a tough company to seriously disrupt. PayPal expects to handle $20B in mobile transactions this year, up from $14B last year.