Facebook Floats Mobile Payment Service

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Facebook is looking to ease the pain of making mobile purchases. The social networking giant is prepared to trial a payment system that will allow Facebook users to pair a credit card with their login information and then make purchases without entering additional billing data during the checkout process.

The trial will be limited to a single vendor called JackThreads, reports AllThingsD. JackThreads targets young men with flash sales. Under the terms of the trial, Facebook users who've supplied their credit card information to Facebook will be able make purchases on JackThreads with but a few clicks.

The purpose of the trial, according to Facebook, is to re-tool the checkout process. The current and varied check-out tools offered by Facebook's partners might be one reason why more Facebook users don't make mobile purchases. Entering credit card and address details on a mobile device is a significant barrier for many. AllThingsD positioned the upcoming Facebook service as a competitor to PayPal, but Facebook denies that posture.

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"We continue to have a great relationship with PayPal, and this product is simply to test how we can help our app partners provide a simpler commerce experience," said Facebook in a statement. "This test does not involve moving the payment processing away from an app's current provider."

Facebook's mobile app partners are welcome to choose any payment processing platform they choose. This trial might eventually make it less of a hassle to buy things from Facebook's online partners, but it does not appear that Facebook is looking to take on the current titans on online and mobile payments, such as Square and Google. Facebook is not quite ready to make that leap.

True mobile payment systems -- those that allow mobile device users to purchase physical retail items with their phones -- are still in trials, as well.

Google Wallet, for example, uses NFC-equipped handsets that are tied to Google account billing info to make point-of-sale purchases on-site at select retailers. The service has been around nearly two years and has been anything but successful. The number of devices and, worse, the number of retailers that support Google Wallet is small at best. In fact, Google Wallet has dropped several features in recent months, such as support for loyalty cards. Google Wallet's future is unclear.

Later this year, AT&T, T-Mobile and Verizon Wireless will launch Isis, the first real effort to get mobile payment services into the hands of smartphone owners. Isis has been undergoing trials in Austin and Salt Lake City since early 2012. It has dozens of retailers signed on, as well as banks such as Chase and American Express. Many of the smartphones already in the hands of AT&T, T-Mobile and Verizon customers have Isis technology and compatibility built in. Isis will rely on NFC technology and bill items directly to customers' wireless accounts.

In order to be successful, mobile payment systems can't be limited to a single phone, carrier or bank. The retailers and merchants, terminal makers, carriers, handset makers and banks all need to be involved. That's one reason mobile payment systems are still scarce. Getting all the parties to agree to the standards, protocols and costs involved is nothing short of a miracle. Isis' launch has been a half-decade in the making, with a wide range of companies playing a large role.

Facebook's ambitions aren't so high.