Photo: Asa Mathat | All Things Digital
Facebook will not build out its own payment platform to rival PayPal, says eBay CEO John Donahoe.Wishful thinking on his part? Maybe, but Donahoe tells us PayPal has, “deep technology,” that would be very difficult to replicate.
From dealing with banks, to creating fraud protection, to any number of other challenges, this just isn’t something Facebook wants to deal with right now.
In short: Donahoe says it would be too much of a headache for Facebook to build a payment platform.
We are at the WWD CEO conference, and we pulled Donahoe aside to ask him what he thinks of Facebook’s virtual goods market because PayPal is now powering micro-payments on Facebook.
He wouldn’t give us a specific number or range for the potential market, but he says it will be enormous.
Donahoe says PayPal will be the platform for Facebook “to build on top of.” He adds, “We’ll be the rails they ride on.”
For now that makes sense. But, if Facebook can afford it at some point, we think it invests in (or acquires) the technology to create its own payment product eventually.