Facebook Tests "Pay Later" Option for Buying Virtual Goods

Facebook is testing a "Pay Later" option for purchasing goods within social games. Users who have never purchased Credits before can spend Credits they haven't paid for and repay the balance later. Users can only repay a balance with a credit card or PayPal, not offers, gift cards, or mobile payment. Therefore, the option may be designed to get users to comfortable with buying virtual goods and get them to put their credit card or PayPal details on file with Facebook for quick purchasing in the future. Facebook has signed deals with all the top social game developers including Zynga to make Credits the exclusive direct payment method. With plenty of games that accept Credits, the biggest barrier to users actively spending is getting their payment information on file. Pay Later, which seems to only be available for some users in some games, addresses this barrier. We obtained this information via an industry source and are currently unable to access the option ourselves. When a user who has never bought Credits goes to purchase a virtual good, they'll see a dialogue pop-up asking if they want to pay later and have "Facebook send you a bill for [price of the good in local currency]." They'll then see their negative Credits balance in red with a link to "Repay" while playing games or using the Games dashboard. Users also receive a receipt for the purchase via email with a link to settle their balance. Clicking these links brings users to an Unpaid Order History page showing the goods they bought, their existing balance, and a "Repay" button. If users choose to repay, the only payment methods which are offered are credit card and PayPal. Once a user has input payment details for one of these methods, future purchases only require a single click. If users want to make another virtual goods purchase, they're given the option to also pay off their debt during the transaction. However, users aren't required to first settle there balance, and can still buy more goods through the Pay Later system, increasing their debt. Purchasing virtual goods is still new to many Facebook users. By providing a free introduction to the purchase process, Facebook may be able to get users hooked. Then, by only allowing users to repay balances with methods which can be quickly reused later, Facebook has converted non-buyers into one-click-buyers. Update: We've learned that that users can only go as far as -50 Credits into debt using the Pay Later option, significantly limiting Facebook's liability.

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Facebook Tests "Pay Later" Option for Buying Virtual Goods

Josh Constine

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Josh Constine