Facebook Payments System Not to Rival PayPal

August 17, 2013, By Sanjeev Ramachandran

Facebook is reportedly testing a technology that would allow users to make payments with just their Facebook login, of course with assistance from e-commerce applications.

Contrary to what was rumored earlier, the new technology has not been introduced to compete with PayPal, but work with it.

There are many who believe that the new system from Facebook will be a threat to PayPal. But since the social media king doesn’t actually process these mobile app payments, it cannot be used as an alternative for Pay Pal.


An online payment expert, Matthaus Krzykowski has stated that, for Facebook to compete with PayPal, the site must become like Visa or American Express. He continued saying that competing with PayPal is a pipe dream.

Facebook officials have been quoted as saying that the company is working on a very small test that let’s people populate their payment information already on file with the site into the checkout form of a mobile phone app when they are making a purchase. They continued saying that the app then processes and completes the payment.

Facebook officials told folks at TechCrunch that they have no idea to compete with PayPal. In fact the social media major wants to continue to have a great relation with PayPal and the only motto behind the new move is to test how the site can help their app partners to provide a more simple electronic payment experience.

The new initiative from Facebook follows an announcement in June when the company said it would phase out its credits system of payments for all games.

The mobile payments scenario is a business with growth potential, and is expecting $1-trillion revenues by 2015.

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