Rather than updating its payment terms without notice to users, Facebook has decided to post its payment terms to the Facbeook Governance page and is open for user feedback for the next 3 days. As Joe Sullivan, Facebook’s lead counsel for product posted today, “The new payments terms will replace the existing Terms of Sale and the payments-related sections of the Online Advertising Terms and Conditions.”
While the payment terms are not as controversial of an issue currently for Facebook, the company has learned its lesson for swapping out the terms for users. There is now a process of review during which time anybody that has concerns can voice their opinions. It’s a new strategy which differentiates the company from its competitors as they attempt to usher in more “openness”. Why is Facebook updating the terms now? Simply because they want to have updated terms as they prepare to test out new payment systems, including integration with the platform.
The timeframe for the updated terms points to Facebook potentially beginning to test new payment features beginning next week. Developers are currently excited about the new possibilities that will be enabled by a new payment platform but many of the existing payment providers have been put on edge. Facebook will clearly have an advantage when it comes to competing on the platform considering that they own the platform.
Facebook credits can be used to purchase gifts as well as advertising currently. As I’ve written before, these payments could not only generate a ton of revenue on a transaction basis but also since there will be a large increase in Facebook advertising spending. While the initial payment system on Facebook will only be a beta test, the company is expected to finalize testing and roll out an official payment API in the coming months.
While there was tons of buzz surrounding the potential for a payments platform almost a year and a half ago, those plans are finally coming to fruition. It will be exciting to see how this new component of Facebook unfolds over the coming days, weeks, and months.