There was a bit of confusion last week when AllthingsD reported that Facebook was creating a payment system that competed with PayPal. The reality is that Facebook is only creating an automatic form-filling function that works with third-party mobile apps. It grabs the information from the Facebook profile of the user, and reduces a task-heavy credit card form to just a few clicks.
Facebook benefits from the conversion rate analytics they will be able to provide, showing which ads lead to sales. Showing positive ROI means selling more ads.
Some Facebook users have Facebook Credits, Facebook Gifts, and other credit card details on file. The number of people who have stored their financial information inside Facebook is not vast, however. It may take some time to build up the feature to a critical mass where it shows value to advertisers.
In contrast, Apple’s iTunes store has massive amounts of credit card data, and obviously has the trust of their customers. It remains to be seen whether Facebook users embrace the idea of Facebook facilitating their financial information for them when they are purchasing.