Behind the Autofill News, a Full Reboot of Facebook’s Payments Strategy

Give Facebook your credit card information and the social network can make things easier for you — and the merchant — when making purchases on a mobile device.

This may sound like a minor pitch, but it constitutes a reboot of Facebook’s payments strategy, which has been a pain point for the Menlo Park, Calif.-based company.

Keying in payment data has been a pain point for customers. “Things that were annoying online may be impossible on mobile,” said Mary Monahan, research director, mobile for Javelin.

But it goes deeper than solving a customer pain point. Facebook knows a whole lot about just about everybody — but it’s missing a key piece of data: their credit card numbers.

And it’s not like the social network hasn’t been trying to get its hands on those digits. The company recently announced the shuttering of Facebook Credits, its longstanding but unsuccessful payments play that began in 2009. Facebook Credits were even for sale at stores like Target for a period in 2010 and 2011. They were used primarily for paying for games within Facebook itself.

Facebook already sees extensive integration with many mobile apps requiring logins, including banking sites such as Moven and GoBank, but its payment initiatives have not paid off to date. Payments account for just 12% of the company’s revenue. The reason seems to be that — for some strange reason — people don’t trust Facebook with their credit card numbers. But TechCrunch points out that Facebook has a better track record protecting user data than Twitter or LinkedIn, for example.

Now Facebook has shuttered Credits and is trying again with an autofill function for mobile checkout that involves partnering with Stripe, Braintree and PayPal.

Users will load their payment information into Facebook much as they would with PayPal or Venmo Touch (a Braintree product)  — both partners on this initiative — to speed up checkout at mobile commerce sites. Currently, the feature is testing with the clothes app JackThreads and the photo app Mosaic.

Customers will give Facebook their payment information, which can then be leveraged to make purchases across its entire ecosystem.

“Facebook depends on mobile ads, and to convert mobile ads is tough,” said Javelin’s Monahan. One click will bring Facebook needed revenue and also be a step toward controlling more of the payments process.

Why does Facebook need PayPal and Braintree at this stage? Because it’s not doing payment processing — not yet, anyway. This small step is likely just a beachhead. Facebook Home signals the company’s limitless ambitions. Mobile users spend more time on Facebook than they doing any other thing, so the sky’s the limit, except for that issue with the lack of trust.

But the network’s numbers count for a lot. Google has 425 million Gmail users; Apple has 575 million iTunes users; and PayPal has its 132 million active users; but Facebook has 1.1 BILLION users. If just 0.1% of them became users of Facebook autofill, once the service is more broadly available, that would be a big factor in the mobile commerce world.