Facebook is very, very serious about the payments business.
Facebook Credits, though? Not so much.
The social network is phasing out its virtual currency, once intended to be the dominant form of payment in games like FarmVille that run on Facebook’s website.
The move allows developers to charge users in local currencies, rather than pricing everything in terms of Facebook Credits. It’s also allowing for recurring subscriptions.
Mike Isaac at AllThingsD has an excellent summary of what went wrong there: Developers stuck with their own virtual money, requiring consumers to first buy Facebook Credits, then swap them for FarmVille Cash or other in-game currencies. That’s an awkward, two-step process.
What Isaac gets wrong is the continuing importance of payments to Facebook. He characterises this as a step back from the payments business.
We don’t think so. Here’s why. In 2011, Facebook created a subsidiary specifically to handle payments processing; it has three job postings for software engineers to do payments work.
And Dan Levy, a veteran of the early, fertile PayPal days, is now a director of finance at Facebook. His ambit includes both payments and mobile. That confluence is not coincidental, we believe.
Facebook recently streamlined payments for mobile Web apps from seven steps down to two. It still has issues in mobile payments—notably Apple and Google’s insistence that purchases of both apps and in-game items flow through their stores and payment systems.
Google may be an intractable problem, given how it butts heads with Facebook. But Apple and Google’s newfound alliance may mean progress on the payments front.
In the meantime, expect Facebook to do everything it can to make sure developers keep raking it in on both the Web and mobile platforms. With its newly launched App centre, Facebook is helping drive traffic to the mobile app stores, where developers make big bucks.
Facebook will figure out a way to help developers generate money from in-app purchases, too. It has to.
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