Will Facebook Credit become your default payment method?

First, there is a quote from Dave McClure’s post Subscriptions are the New BLACK. (+ why Facebook, Google, & Apple will own your wallet by 2015)

Well at this point i hope you’ve pieced it all together.  The key to success — one might even say DOMINANCE — in payment systems is to begin with the foundation of frequent-use products, so that users won’t forget their passwords.  Whether intentional or not, Facebook has played this game to perfection.  Not too far behind is Apple with iTunes, iPhone, and other related frequent-use media & entertainment products, and an App Store that people use regularly.  And even Google has a shot here, with both Gmail and YouTube as two very large, frequent-use products, along with the upcoming Android platform.  Twitter is probably a dark-horse here, but if user #’s continue to improve they could also have a shot. And i’d also keep an eye on Skype too, which still has a lot of frequent users and value.

Second: Facebook’s announcements at the f8 conference. As summarized by Mark Zuckerberg:

We are building a Web where the default is social.

In more details, it means several technical implementations which could, in the long term, change completely the way you interact with the Internet:

– Social plugins: A set of plugins that will allow websites to better interact with you as well as allowing you to share more. The most visible is the Like plugin, with which you can instantly highlight content you like, linked back to your Facebook wall and profile. The Like plugin is different because you don’t need to specifically connect to Facebook to use it; you are automatically recognized if you have connected to Facebook previously. Interestingly, websites can also use your public details to customize their contents to your public profile.

– The Graph API, which standardizes the Facebook social graph and makes it easier for developers to read and write data with Facebook. This should happen in real time using webhooks. Looking at the current specification, there is no indication that Facebook Credit is part of the current roll out, however….

Facebook could have set itself to become a major player in payment:

A small side note first: one of the few disappointments from the f8 conference is how little Facebook has communicated on Facebook Credit, its virtual currency. The only announcements are an extension of the Beta program and an increase in the number of authorized funding payment means. However, it has been hinted in recent interviews that Facebook Credits could become the default currency.

Now, with further integration between websites and Facebook, and considering this massive weapon that is the users base of Facebook, it would be possible for them to extend their Facebook Credit beyond the Facebook walls, transforming it in a default web currency , why not with its own Pay button? (rendered speculation on the Read Write Web article by me). With OAuth Facebook is also integrating a recognized standard that could be used for a payment authorization protocol (Open Transact)

With a 30% fee on Credit, Facebook is potentially creating an important source of revenue for them. This is where Mark Zuckerberg’s statement may soon be wrong.

“You may not believe me when I say this. We are doing it for developers. But it’s not a revenue opportunity anytime soon. Ads are a very good business. We are doing this for developers. With credits, it becomes easier for people to buy things across apps. Rather than being locked into one app that has their credit card, they can buy in any app. This is a canonical economics example where it makes sense to have a standard and have just one, or a few, and that ends up being better for everyone.

There is a lot of overhead for us doing this ourselvess. It’s a lot of hard work. We don’t expect it to be profitable for a period of time. We are doing this for developers.”

Hole filling anyone?

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