Facebook Friends PayPal
So much for those rumors about Facebook Credits becoming a direct competitor to PayPal. This morning, the social network said it is adding PayPal as a payment option for both Facebook advertisers and users.
The move is primarily aimed at making it easier for international advertisers to purchase Facebook Ads, but it will also give Facebook users another option for buying Facebook Credits, which can then be used to purchase virtual wares in the site’s gift store.
“We want to give the people who use Facebook, as well as advertisers and developers, a fast and trusted way to pay across our service,” Dan Levy, director of payment operations at Facebook, said in a press release. “As our business has grown, offering local methods of payment has become increasingly important for advertisers who want to buy Facebook Ads. Teaming with PayPal, a global leader in online payments, makes this possible.”
Another thing it will make possible: Increased revenue. As J.P. Morgan analyst Imran Khan noted in a research bulletin issued after the announcement, “More than half of US internet users now use Facebook, and globally the site represents ~5% of all time spent online. Additionally, we think social games generated more than $500M in revenue in F’09, and the sales of virtual goods and premium services are a key part of the revenue model for such games–one which we think has been constrained by the shortage of straightforward payment options.”