Facebook, PayPal green-light payment partnership

The eBay-owned transaction system can now be used to buy Facebook ads and "credits"--another indication that Facebook has changed its e-commerce plans from wanting to beat PayPal at its own game.

Here's another one of Facebook's gradual moves into the e-commerce world: The company announced Thursday a "strategic relationship" with eBay-owned payment system PayPal to make its technology available for the purchase of self-service ads as well as the Facebook Credits currency .

"We want to give the people who use Facebook, as well as advertisers and developers, a fast and trusted way to pay across our service," Dan Levy, director of payment operations at Facebook, said in a release. "As our business has grown, offering local methods of payment has become increasingly important for advertisers who want to buy Facebook Ads. Teaming with PayPal, a global leader in online payments, makes this possible."

PayPal, which operates in 190 markets with 24 currencies, is often used as an alternative for customers who don't have credit cards, something that will be useful in international markets where it may be more difficult for small businesses to purchase ad space on Facebook.

A few years ago, Facebook's e-commerce plans were rumored to be a competitor to PayPal, code-named "Facebook Wallet." The project was far enough along that Facebook was demonstrating prototypes to potential customers in the industry, sources say. But the "Wallet" never made it to market, and Facebook's e-commerce plans have shifted to the "credits" system and its focus on micropayments and virtual goods. Right now they're used in Facebook's "gift shop" as well as with a few beta-test partners in the social gaming and nonprofit space .

In addition to PayPal, credits can be purchased with credit cards or a mobile phone number--the social network has partnered with Zong, one of a handful of companies in the pay-by-mobile niche, to power that.

PayPal co-founder Peter Thiel, an early investor in Facebook, sits on the social network's board of directors.

About the author

Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.

 

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