Facebook expands mobile payments with Gifts

Facebook is getting a lot of attention today with the launch of Gifts, a service that enables users to shop for and buy goodies for fellow Facebookers. The offering is both simple and compelling: Gift ideas pop up on friends’ special occasions — a birthday, say, or anniversary — and buyers can choose a present and send it with a few clicks. Friends are notified and asked to enter their addresses for delivery. (Facebookers can also buy gifts at any time for themselves or other users, of course.)

This is pretty compelling on several levels: Facebook Gifts launches with more than 100 retail partners including Starbucks, which is selling their ever-popular gift cards through the service. So it instantly creates a new revenue stream for Facebook’s mobile business beyond advertising and sales of virtual goods. And tying Gifts in with special occasions serves as a timely reminder as well as providing a convenient way for buyers to cross an item off their to-do lists.

Perhaps the most interesting thing about Gifts, though, is the enormous amount of data it will generate. Facebook will be able to track shopping habits and will store mailing addresses of users who receive gifts (and who isn’t going to give up their address to get a gift shipped to them?). More importantly, though, buyers will have to give up credit card information to use Facebook’s payments platform, which will handle transactions. That not only makes it easy for users to continue to buy stuff in Facebook Gifts, it would make it easy for Facebook to extend its mobile payments business beyond its own social network. I don’t expect that to happen any time soon, but it might be laying the groundwork for a much broader mobile payments business.