Facebook updates payments terms to reflect addition of subscriptions, Credits phase out and more

Facebook has updated its payment terms for both users and developers following Tuesday’s announcement that it would support monthly subscription billing for apps and games on its platform and phase out Credits in favor of a user’s local currency.

Note that Facebook’s transition from Credits to local currency is not an indication that the social network is getting out of the payments business. In fact, it is expanding it to be more similar to Apple’s iTunes App Store model, rather than emphasizing virtual currency. This should give Facebook more flexibility as it looks to monetize apps beyond games.

Overall, the new policies are more comprehensive and better organized, which is important as the number of users and developers who use Facebook’s payments platform expands over the next year to include more non-game transactions.

For users, the social network added more information and terms about various payment methods, and made it clearer that users under 18 cannot use Facebook Payments only with the involvement of a parent or guardian. The age stipulation was previously one of the final points on the user terms page. Now it is in the second paragraph. The payment methods section, including a definition of Facebook Credits, is completely new.

In the new payment methods section, the company expanded its payments terms to explain its policy around gift cards and introduced terms around mobile billing. For example, Facebook noted that it is not a bank and that gift card balances are not deposits and do not earn interest. Surprisingly, Facebook didn’t make any mention of mobile billing in its previous policy. The social network recently rolled out a two-step payments flow for mobile apps, but has supported mobile carrier billing for years.

Readers can compare Facebook’s new user payment terms with its previous policy from March 27 here.

For developers, Facebook changed its “Facebook Credits Terms” to the new brand of “Facebook Developer Payment Terms.” The terms page now includes more explanation of payouts and introduces the term “developer balance.”  Whenever developers complete a sale on the platform, Facebook will credit the proceeds, minus a 30 percent service fee, to a developer’s balance. The new policy is reorganized with clearer headlines and explanations, for example, including a section called “Your Responsibilities and Risks.” The section compiles conditions that were previously incorporated into several different areas of the document.

Developers can compare Facebook’s new developer payment terms with its previous credits policy from November 2011 here.