Facebook may step into PayPal's territory as it reportedly plans to test a service that lets users make purchases on mobile apps using their Facebook information.
Facebook said it is working on a "very small test" and the company says there is no set schedule for making the service available to users. The service would use payment information that shoppers store on Facebook to automatically complete checkout forms of certain mobile apps. Then, the app would process the purchase.
Facebook has a "great relationship with PayPal, and this product is simply to test how we can help our app partners provide a more simple commerce experience," said Facebook spokeswoman Tera Randall.
The test won't involve moving payment processing "away from an app's current payments provider, such as PayPal," she added.
Forrester Research analyst Denee Carrington thinks Facebook will face a challenge in offering mobile payments even though the company has been building up its database of users' credit cards.
"Consumers want safe, seamless and convenient mobile payments and there are a growing number of competitors that consumers trust more - such as PayPal, Visa (V.me) and others," Carrington said.
AllThingsD reported the feature will launch in the next month or so. The first partner is JackThreads, an online shopping site for young men, according to AllThingsD, which said Facebook was interested in partnering with JackThreads because some of its customers may be gamers and have previously shared payment information with Facebook.
For now, the report said, the Facebook test feature won't actually handle payment processing but will simply provide the billing information and speed along the process. But if the test is successful, Facebook may decide to get involved with payment processing, simultaneously cutting out competitors and creating another line of revenue.
Getting involved with its users' payments may also be beneficial for Facebook as it would gain data on their shopping habits. That information could help the social network better target ads.