Tag Archives: payments


Do you play Games on Facebook? Get ready for Facebook Credits.

With over 500 million users worldwide (source: Facebook) & the most dominant & largest social networking platform, Facebook has surged ahead by leaps & bounds. Facebook, with more than 50% control over virtual goods offered in social games on its network, is looking at as a huge revenue stream.
And this is where a new payment stream of ‘Facebook Credits’ will come in picture and add-on to the existing revenue line.

What is this?

While playing games online the players have the option to buy Virtual goods in the game. Virtual goods include weapons, tools, animals, and practically anything imaginable in the context of a social game. The currency used for such purpose is called the In-game currency. This is a virtual currency that a developer creates for use in a specific game or set of games. In-game currency could be “directly purchased by users with real money (i.e. Dollar, Pounds etc.).

Let me try share an example here:
While playing online Mario Bros. Game or Super Contra or Commando (oh used to love those!!) the player can buy an extra life or special weaponry etc. virtual goods. The player needs to pay using the in-game currency. The players can get this in-game currency by paying in real money (via Paypal / credit card etc.) to the game owners directly. Thus Social game developers generate revenue when users purchase “virtual goods” and “in-game currency” during game play.

Facebook Credits is a virtual currency system or an in-game currency system which shall be used by the social gaming audience on Facebook to transact & buy virtual goods in their social games. For example, in the popular Facebook game “Farmville,” players manage a virtual farm by growing crops and raising livestock. Players can purchase virtual goods like tractors. The currency shall be maintained by Facebook.


An extension to the Facebook Credits is that users can further use the Facebook Credit outside their games as well to buy Virtual Gifts. A Facebook user can purchase a virtual gift through the “Sending Gifts” application and give it to a Facebook “friend,” who would then have the gift displayed on his or her profile.

Source: Facebook, Send Gift on Facebook, http://apps.facebook.com/sendyougift/

Change is Law

  1. Presently, game developers have the option, but are not required, to use Facebook Credits as their sole in-game currency on the Facebook platform.
  2. Effective July 1, 2011, however, Facebook will require social game developers to exclusively utilize Facebook Credits for the purchase of virtual goods.
  3. Users must purchase Facebook Credits directly from Facebook and then use the Credits to purchase in-game currency.
  4. Users must purchase Facebook Credits from Facebook with a credit card, PayPal, Or a mobile phone.


Revenue Potential

  • Developer revenue from virtual goods purchased in social games in the U.S. totaled $865 million in 2010, and is expected to hit $1.25 billion in 2011.

  • Facebook Revenue shall be a 30% of the developer revenue as game developers must pay a 30% service fee for all Facebook Credits purchases.

Whats in store for the Future?

Mark Zuckerberg, the Chief Executive Officer of Facebook, has said that the company plans to do “a lot more” with Facebook Credits.

  1. One option is of developing it into a system for micropayments open to any type of application on Facebook.
  2. Thus Facebook Credits can be applied towards other online media products, or non-gaming digital goods, such as pay-per-view movies, TV, music, and news articles.
  3. Facebook Credits can eventually become a payment method outside of Facebook, usable for purchase of virtual goods on other platforms.
  4. Facebook will provide users with free Facebook Credits to watch advertisements for which third parties pay Facebook

Thus the future seems to all virtual. This is really astonishing where someone has created a virtual currency & virtual goods & virtual games, and real people are using real money to buy them to have real fun.

Is there anything you have to say about this?



Visa’s new one-click payment designed for India ?

Visa has developed a single click point of sale payments mechanism for online payments. The interesting fact is that it will handle both Visa & Non-Visa payments. The visa press release though doesn’t mention in detail on how will the system work, but states that the users can shop “by simply entering an email address, alias or online ID and password, instead of a billing address, account number and expiration date”. Such a system is bound be hit by ever skeptic customers (specially Indians ) who are varied of going for any new mechanism for online transactions involving their hard earned rokda i.e. money.

In term of competition I feel there are already so many players in this field  e.g. Amazon’s 1-click and PayPal services, where Paypal already has  more than 98 million active users (though it charges a premium rate of 30 cents + a percentage rate per transaction) . I guess adoption by both merchants & customers is the biggest success attribute here.

From an Indian market perspective the credit/debit card subscriptions are high but card usage is relatively low. However the exploding mobile revolution with burgeoning mobile users touching 770 Million, the perfect channel of growth for payment industry is the cellular medium. The interesting fact is that the most important payments mechanism i.e. mobile payments will be catered later by VISA. It will however be using the NFC (near field communication) technology.

Airtel being another stakeholder in this industry has already launched Airtel Money – a scheme where mobile payments services are provided by the service provider. Considering NFC being the upcoming technology in this arena & widely talk about the next in thing when most of the latest mobile phones will have NFC enabled chips, the player who captures the opportunity first & throws it open to the Indian market will have a chance to catapult great growth figures in the payment industry.