Facebook Now Takes PayPal

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Over the last year or so, Facebook has been gradually ramping up its Credits system, which for a long time was used just to purchase virtual gifts (now you can use it to buy real gifts, songs, and it’s been integrated with some applications). Today comes news that will make it even easier to buy Facebook Credits: you’ll be able to buy them with PayPal.

The new partnership actually encompasses a few areas of Facebook’s payments. Along with Facebook Credits, you’ll be able to use PayPal to purchase Facebook Ads.

This is big news for both companies. PayPal has been trying to establish a greater presence in micropayments and on Facebook itself. And Facebook will now make it easier for PayPal’s 81 million users to quickly stock up on ads and buy its credits, which are only going to become more important on the site going forward. Other payment options for Facebook include standard credit cards and mobile phones (using Zong).

One other reason why this is interesting: given Facebook’s interest in extending itself beyond Facebook.com through services like Facebook Connect, it wouldn’t be surprising if it started prompting people to start “Paying With Facebook” on external sites, which would make it competitive with PayPal.  Given how nascent Facebook payments are this would likely be a long ways off (if it’s even coming).

Note: I made the image above, so the payment screen may look a bit different.

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