We’ve been saying for a while that Facebook’s payment platform is a huge opportunity for the company to start making serious cash but there’s one issue with that logic: the majority of users don’t have credit cards. While nobody knows the exact number of Facebook users with credit cards, the most recent estimates are that only around
30 percent of Facebook users 25 percent of internet users have access to a card. The other 75 percent either have a mobile phone, that they can pay with via Boku or Zong, or are out of luck when it comes to making an online transaction.
The market for credit card transactions is still huge though. Even the iPhone bills applications to your iTunes account and so far over 1 billion applications have been downloaded, many of which have been paid for. Facebook clearly wants to provide a service which is similar to the Apple iPhone but there is still a huge market which Facebook isn’t tied into and is currently funding a large portion of the platform economy.
One issue with mobile payment solutions is that the barrier to purchase is so low that it’s ripe for abuse. Over the past couple weeks I’ve discussed the developer and ad network race to the bottom which ended in SocialHour and SocialReach being shut down (although they are expected to return at some point). Mobile payments were behind a lot of the ads being offered and even today, there are a large number of IQ quiz ads that take advantage of reverse bill SMS payments.
While I’d expect the industry to evolve as virtual gifts and virtual currencies become more widespread, there is still a high risk of abuse and that’s something Facebook most definitely wants to avoid. With so much revenue generating opportunity though, it’s hard to ignore. With the majority of Facebook’s user base being international, the real question is not if but when Facebook will become involved with mobile transactions.
After thinking about the math for a minute I realized there was an inaccurate association. While 75 percent of internet users may not have access to a credit card, nobody knows which percent of Facebook users actually have a credit card. While the assumption is that a large number don’t Facebook could contain only those internet users that have credit cards (although that’s highly unlikely).
Some of the commenters seem unclear on my numbers which is understandable 🙂 Here’s the most recent logic: “25 percent of internet users have access to a credit card” does not inherently mean that only “25 percent of Facebook users have a credit card”. The reason being that a large portion of registered Facebook users may actually have a credit card. Also, when I say credit card that can be a debit or check card as well.