Not Coming Soon: Facebook Holding Off on Plans for Platform Payment System? (Updated)

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facepalIt was one year ago last week that Facebook announced the beta test of its Facebook Platform payment system that would allow applications to start accepting payments from users directly inside their Facebook apps. However, one year later, Facebook has not developed the system, and some signs from the company point to the project being on hold altogether while it focuses on other priorities.

Originally billed as a way for developers to conduct e-commerce transactions without the need for third party payment platforms like Paypal, a Facebook payment solution would make purchasing both virtual and physical goods and services inside Facebook apps much more integrated with the Facebook experience.

Facebook Payments also has the potential to become a significant revenue generator for Facebook through commissions, as well as a way for Facebook to get a lot more credit cards on file for future direct transactions like the purchase of Facebook’s own virtual gifts.

However, Facebook has apparently decided not to get in the middle of third party transactions so far, leaving merchant solutions to other payment processors. Developers can continue to choose between established providers like Paypal and new entrants like Spare Change and Zong.

When asked directly about the future of a Facebook Platform payments system this afternoon, a Facebook spokesperson said, “We’ve been excited by advertising and payments solutions provided by the market, and we currently do not have anything to share around a Facebook Payments system at this time.”

Update: For further analysis see our 12/30 post Why Facebook Opted for Platform Growth Over Platform Monetization in 2008.