Facebook's payments system predicted to bring in up to US$250 million

Staff Brand Republic , 04 February, 2010

Global

Facebook's new payments system is predicted to haul between $125 million and $250 million in revenue this year, according to research from a US analyst.

The system, which is still in a test phase after going into operation last summer, allows users to pay the publishers of games and apps on Facebook for virtual goods.

According to research service The Internet Analyst, Facebook is charging publishers 30 per cent on each sale, which is far more than competing services.

However, it said: "When the competing payments service is turned on for a given game, there is an immediate slew of transactions, indicating that consumers prefer the Facebook system to other payment methods (and, equally important, that the Facebook system drives other transactions)."

"It's unclear what the timeline is for a formal launch, but we've been told that Facebook is continuously adding publishers, with most of the largest ones, like Zynga and Playdom, not yet integrated."

"Those close to the situation tell us that the royalty is part of a larger strategy to monetise the viral marketing and distribution services that game publishers have essentially been receiving for free from Facebook."