Facebook will ramp up mobile payments on its network, as it readies for its IPO and strives to compete with Google for ad and gaming revenue.
Bango, a mobile payment and data analytics firm serving other corporations like Research In Motion and Amazon, announced Wednesday it “signed an agreement to offer payment services to Facebook,” but didn’t offer details.
Facebook is the giant of social networking, but can’t trump Google’s ad revenue, which is self-generated across multiple online services from its search engine to YouTube to Google+. Facebook’s IPO is set for this spring, and the social networking site needs to prove it can grow its user base, add revenue streams and compete with its rivals.
The company recently added dozens of popular apps and games in preparation for its IPO, and a mobile payment system will make those offerings easier for users to use. Along with mobile payments, Facebook will also integrate advertisements into its mobile apps, potentially bringing ad dollars along with it.
Mobile payments and advertising seem a smart way to counter Google and take back some control. Roughly 425 million people access Facebook through its mobile app, and the new purchasing system will allow those users to buy Facebook credits, typically used for apps and games, directly from their mobile devices without having to enter credit card information.
The partnership builds on Facebook’s existing strengths in gaming as well. Gaming is a major component of the network’s revenues, as Facebook takes a 30 percent cut of all gaming transactions, adding up to nearly $600 million last year alone.
Games like Zynga’s Farmville generate sky-high revenue for the site, but aren’t exclusive to Facebook, meaning Zynga will likely begin offering its games to other rival social networks like Google+.
A simplified mobile payment system will make it easy for consumers to quickly purchase game credits, and with popular games like “Angry Birds” coming to Facebook, the accessibility could bring new users and increased profits to the site.
Bango, a 13-year-old company with experience in the mobile platform, seems a solid partner, and Facebook can also use its analytics division to better tailor their mobile ads to consumers.
Facebook is pulling out all the stops as it heads towards its IPO, and is determined to prove a worthy competitor against Google as the battle between the two technology giants continues to escalate.