Facebook Developing Mobile Payment Service That Could Challenge PayPal

Facebook is testing a new purchasing product that the company hopes could take the place of PayPal.

Facebook is working on testing the new payments service that lets online shoppers buy on mobile apps using their Facebook login, according to AllThingsD. Much like how many users already use their Facebook login as a way to access comments across the Internet, their login will also be their digital wallet.

Anyone who has already given Facebook his or her credit card details could buy on any e-commerce partner's mobile app with just the login. The service is supposed to roll out in the next month.

Facebook's new service takes aim at PayPal, which has the lion's share of digital payments on wireless devices. But anyone who has used PayPal and had their account frozen for no apparent reason (full disclosure: I have) knows that the service can be greatly improved upon.

For the record, Facebook told AllThingsD that it has a "great relationship with PayPal" and that the new service is simply to provide partners with a "simpler commerce experience" rather than freezing out PayPal.

Facebook's new service will also give the social network more information on users' buying habits -- and all the more data for it to sell to advertisers and marketers.
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