Last week, Facebook announced that its subscription billing app is now available to all developers. (Kixeye, Disney’s Playdom and Zynga have been testing the app since June.)While gaming sites and paid content sites using social readers may be excited about this news, the app may not actually be to their fiscal advantage.For one, Facebook is taking a 30% cut of all subscription fees. That’s enormously high for payment processing services. While there was no formal word from Facebook on its justification for that high a fee, it’s possible they’re just swiping a page for Apple’s playbook. The problem is that Apple actually has a hardware platform that publishers like designing for — Facebook’s platform is neither that enticing nor that friendly to long content experiences.The other possible problem is how Facebook processes payments. Consumers will see “Facebook” on their credit card statement, not the name of the merchant, which is likely to increase churn and cancels. (Google Wallet has adopted this practice, too.)
However, to its credit, Facebook does have a very clear interface to help consumers manage multiple subscriptions.
Here are some of the other features of the Facebook subscription app that you should know before deciding whether to utilize it:
- The app accepts most major credit cards and PayPal (although PayPal has some drawbacks for recurring billing).
- Right now, monthly subscriptions are the only option; there is no option for an annual plan.
- The app can be tailored to local currencies.
- Merchants can offer a free trial.
- Merchants receive a daily report of transactions. They can also request real-time reports.
- Consumers who upgrade to a more expensive subscription plan will be charged immediately and get access immediately. Subscribers who downgrade will be charged the lower amount at the time of the next billing cycle.
- Facebook will not take any action on chargebacks.
- Facebook will retry declines every three days, up to three times.
- Merchants can take credit card payments not only for access, but also in exchange for online currency. Gaming sites will most benefit from this option.
Obviously, there’s a lot to evaluate about Facebook’s new subscription app. For now, the heavy commission makes me advise paid content sites against signing up for it, especially since there’s no research yet on how amenable consumers are to paying for subscription products through Facebook. But that may change, and I’ll be sure to let you know when it does.