Today is a big day for Facebook Commerce. In my opinion, FB Credits have taken a big evolutionary step towards being used for a general payment system. In this post I’ll update you on that step, but before then let me share my theory about where FB Credits are heading.
The past and future of FB Credits
I’ve long believed that FB Credits are on their way to being used as a general currency across the internet for all goods. I believe think this will take a three-four phase lifecycle:
- Phase I – FB Credits used for games and in-app virtual goods – we’ve obviously been in this phase for the last year+
- Phase II – FB credits used for non-game digital goods – tickets, music and movies are the logical choices as those large markets that have gone digital already and you have tons of merchants that want access to the FB user base. Adoption here will ride the viral wave and be massive and faster than anyone can predict IMO.
- Phase III – FB Credits used for physical goods on FB – This is a big step, but once a large portion of FB’s 600m active users start to have FB Credit balances, it will be natural that they will want to spend that currency on physical goods as well as virtual+digital. The easiest path here is on-FB purchases. The FB Credit biz model will have to include a much lower take rate (2-4% is standard for physical goods) to work here, but PayPal and GCheckout both have bifurcated (digital+physical) biz models so there is a path there that has been well worn.
- Phase IV (could be included in above) – Finally the next logical step is that FB Credits will move off of Facebook just as FB Connect, Like and comments have and become a generally available payment system. Think about it – you spend more time on FB than anything, it’s your trusted source for authentication across the internet and thus the most logical place for your wallet to live. Why have to go login somewhere else when you are already (always) logged into FB. And you are always logged in on your smartphone so it’s natural for mobile as well.
- This has obvious serious implications for PayPal. PP is a funding source for FB Credits, but if FBC moves up the food chain and owns the ‘pay with…” part of the checkout, that relegates PP to a funding source which significantly hobbles it, eventually cuasing it to wither on the vine.
With that context, let’s dig into what I call Phase II of the FB Credit lifecycle and see what it’s like to use these to buy something that is not a FarmVille Cow.
Phase II for FB Credits – Digital Goods?
First you have to go to this Dark Knight rental specific Facebook page . From there you click on the first wall post to be redirected to this launch screen:
Clicking the Watch Now takes you to an interactive movie poster with this blurb->
Once you enter your zip and ith the Pay with FB button, you are given a ‘purchase confirm/Buy-it-now’ dialog that also updates you on your FB Credit balance (handy):
After hitting Buy Now, you are given an order confirm/success dialog->
Finally, the movie viewer ‘goes hot’ and you can watch the movie right there on FB-> (click to enlarge)
So there you have it, as easy as an Amazon 1-click, I purchased a movie rental on FB using FB Credits. No credit card, no fuss, no muss, didn’t even have to leave FB!
A behind the scenes look at the Dark Knight FB Movie Rental
As a certified geek, I’m always interested in what is powering things and this system has two interesting ‘supporting characters’ that you may miss if you aren’t watching:
- Milyoni – One of > 30 vendors with FB page stores appears to be the intermediate vendor here. They are handling customer support as well as it appears clearing payment.
- JW Player – Instead of using a standard Flash player, they are using the open-source private label JW player. This allows for customization and advertising (maybe down the road there will be two options – ad free and ad supported?
Welcome to Phase II of Facebook Credits?
Facebook Commerce Strategies readers, what do you think are we seeing a big step here? When will we get to Phase III, IV? Sound off in comments.