Facebook and PayPal announced today a new partnership that would integrate PayPal's payment system into Facebook, offering a new for way users to purchase credits and for advertisers to purchase ads.
Users purchase Facebook credits for a number of things, mostly virtual goods, but also real gifts and songs.
Previously, purchases could be made with a regular credit card or via mobile phone, with services like Zong.
The latest move is largely targeted at Facebook's massive international community, 70% of the site’s more than 400 million users. Because customers abroad prefer to pay with their bank accounts rather than credit cards, PayPal integration on the social site will be a welcome addition to many international users and businesses.
"As our business has grown, offering local methods of payment has become increasingly important for advertisers who want to buy Facebook Ads," said Dan Levy, Facebook’s director of payment operations, in a statement.
In 2009, Facebook saw its revenues rise more than 70% and the company announced that it had become cash-flow positive. Though Facebook has not yet reached profitability, let alone of the kind that its investors might be hoping for, at least it's heading in the right direction.
Though some believed that Facebook would develop its own payments system that, like Facebook Connect, could be integrated on third-party sites across the Web, any such offering does not appear to be coming very soon.
With such a system, however, Facebook would only be accelerating its rapidly growing influence across the Web. Today, Facebook at last bumped Yahoo! from the spot for second most popular site on the Internet, according to data from Compete. Only Google remains to be dethroned from its long-held number one spot.
The fact that PayPal itself already has 81 million registered users can't be detrimental to the deal.
(The image in this article is a mock-up of what the system will look like, courtesy of TechCrunch.)
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Zong is the leading mobile payments platform for sellers of digital goods and services. Its frictionless payment experience converts shoppers into buyers at rates up to 10 times greater than traditional payment methods. Zong leverages direct connections with mobile network operators around the world to provide a secure payment solution with unrivaled connectivity and service quality. Zong is the mobile payment provider for Facebook Credits and also works with hundreds of leading destination sites, such as Gaia Online, IMVU and Playdom. Reaching over 2 billion mobile users, Zong provides localized payment capabilities in over 30 countries in 16 languages. Zong is the only mobile payments platform that combines the high conversion rates of carrier billing with the low costs and flexibility of payment card networks. Zong is based in Menlo Park with offices in Paris and Geneva, and is backed by Matrix Partners, Advent Venture Partners and Newbury Ventures. For more information, please visit www.zong.com.
