Seriously? Ads?

"Standard" debit cards aren't really standard outside the US either. Maestro (chip + PIN) doesn't work online, for example.

Your average suburban mom out there know nothing of Facebook's tussles with user privacy.

The second biggest social network in The Netherlands (Hyves) introduced something like this in 2010. They mainly intended it to be used to pay back (small) debts to friends or relatives, but also made partnerships that enabled you to order food online or order drinks at a bar.

As far as I know, it did not really lift off, but this could be because Facebook overtook Hyves as the most popular social network shortly afterwards.

It's a possible but hardly compelling:

Facebook: ~ 1 billion customers

Visa: ~2 billion cards out there.

Facebook: ? merchants.

Visa: > 10 million merchants.

Facebook: potentially disruptive to the existing market

Visa: 50+ years experience with electronics payments processing, fraud detection, government relations and consumer credit marketing

Facebooks main competitive advantage is(was?) relatively cheap capital.

http://corporate.visa.com/_media/visa-fact-sheet.pdf

Edit: Corrected years, added reference

I think that "be a payment provider" is a much easier thing to think than it is to do.

While it may be easy to build the customer side of the equation you've got to build a vast network of merchants willing to accept payment and that's hard work. Especially if you're trying to convince them to re-price in Facebook Credits?

Sure, you could charge 1% but people have added credits to their Facebook account at some point and it probably cost you more than 1% to allow them to do that. How do people buy credits right now? All those cost Facebook more than 1%, right? I buy $100 of credits, it costs F8 a couple of bucks, I then spend $100 of credits and they recoup $1 of it in merchant fees? Doesn't sound like a good business model.

Beyond the need to create a financial model that makes sense and then go out to find merchants and convince them there's a massive risk of merchant fraud.

Fraudulent merchant X signs up for a F8 Merchant Account. Fraudulent customers A, B, C buy something with stolen credit cards for $100 each. Everyone disappears after merchant X receives settlement. F8 is out of pocket to the tune of the original $300, another $300 in reversals to their bank and then $30-$60 of chargeback fees. If that happens enough then F8 might even have its merchant account revoked... though they're probably big enough to avoid that.

It's an excellent money laundering channel too and there's a lot of financial regulation to navigate around that.

I know that this stuff can be overcome but it is hard to do and would be a major piece of work. This type of thing nearly sank PayPal back in the day.

Perhaps I'm missing the point here though?