This weeks Virtual Currency News roundup includes: Google Checkout to relaunch with micropayments, The Virtual Currency Revolution, Nonprofits test Facebook’s credits platform, Virtual currency takes off in Asian social networking sites, How Renting Virtual Goods works in Asia, txtNation bet on micro-payments, TrialPay and WeeWorld chose BOKU as online payments system, and Facebook Targets Paypal.
Google Checkout to relaunch with micropayments
Jessica E. Vascellaro reports that Google may be planning to help newspaper companies get paid for their work. Google is “planning to upgrade its existing Google Checkout payment service to handle billing and subscription services targeted at premium content creators like newspapers, according to a memo the company recently submitted to the Newspaper Association of America.”
Nieman Journalism Lab spotted this memo which responds to the NAA’s open request for new “paid content” solutions earlier this summer.
Google is working on new Checkout features that will allow publishers to charge prices from a penny (micro-transactions) to several dollars for digital content, such as news stories.
The Virtual Currency Revolution
Andy Jordan on the UK’s Guardian writes that “While local currencies have come and gone, many involved in social networks are hoping peer-to-peer (or P2P) virtual currencies will, given the momentum to retool the financial system, have more staying power.
He quotes the founder of Hub Culture. “You’re going to see inexorably, the movement towards peer to peer finance,” Stan Stalnaker says.
Hub Culture created a digital currency — Ven — which is pegged to the dollar, and allows members of the social network to trade goods and services as well as knowledge.
Why start a new currency?
1. Mostly to accommodate members who were juggling multiple currencies traveling all around the world.
2. He adds that “a social network is an ideal place to start a personalized currency, as it has trust built into the infrastructure already.”
Another virtual currency plugs into Microsoft Outlook. It uses a digital currency called “Serios,” which is attached to emails to signify urgency.
As you only gets a fixed number of Serios per week, it creates a marketplace for attention. You can “earn” Serios by performing tasks, such as completing an assignment ahead of deadline, for instance.
This reflect Chris Andersen’s thinking in this book, Free.
This makes sense given the “gift economy” as there is an abundance of information but as scarcity of attention, attention, trust, and reputation.
Not everyone is convinced.
Douglas Rushkoff, has tried to convince Craig Newmark to start a digital currency based for Craigslist.
“What people want is the ability to transact,” Rushkoff says. “They live in a world now where the money they want to use to transact is also being used by speculators to extract value from their communities. And it’s not a tool that can do both jobs well,” he says.
Nonprofits test Facebook’s credits platform
CNET reports that four nonprofit organizations will help test Facebook’s “credits” platform.
“We’re going to be reopening up charity gifts in the Gift Shop,” said Facebook. “We are exploring ways for developers to use the Gift Shop to offer…virtual, real, and charity gifts.”
The four test partners are Project Red, Kiva, Toms Shoes and the World Wildlife Fund.
Inside Facebook also reported that online gift and greeting companies–American Greetings Interactive, GreetBeatz, Someecards, and Real Gifts–would also be selling virtual gifts in the Facebook gift shop as part of a test of the new “Pay with Facebook” virtual currency.
Facebook uses “credits” to sell internal and branded virtual gifts, a change it made last November (gifts had originally been listed in U.S. dollars).
Virtual currency takes off in Asian social networking sites
Brenda Goh, from Reuters, reports that, Asia’s social networking sites appear to have solved the conundrum of how to leverage big profits from their extensive user bases.
Asians spend an estimated $5 billion a year on virtual purchases via websites such as Qzone, Cyworld in South Korea and mobile-phone based network Gree in Japan, according to Plus Eight Star.
That’s about 80 percent of the global market for virtual products.
80% comes from the sale of such items as equipment for online games such as rods for GREE’s fishing game Tsuri Star 2. The rest comes from purchases for avatars on social networking sites.
Brenda adds that “The evolution of virtual money on social networking sites in Asia is partly due to a less developed online advertising market which drove Asian web businesses to seek new ways to profit.”
How Virtual Rentals Work
Asian social networking sites earn most of their revenues from their users, not advertising.
Members are represented by avatars and acquire virtual currency from the sites to buy digital goods, game packages or upgrades.
1. Habbo, a social networking site for teenagers owned by Finland’s Sulake Corporation, sells virtual clothes and furniture.
2. Pet Society, which is available on Facebook, let you raise virtual pets, sells goods such as virtual pet accessories and e-food.
3. Second Life offers a range of e-wares for sale for Linden dollars. Some are mundane and others are controversial such as guns and virtual phalluses with price tags based on the size.
In Asia, Cyworld rents background skins of popular South Korean baseball players for limited periods. Such rentals drive repeat sales and tap into trends.
txtNation bet on micro-payments
If micro-payments are finding their own target market, it appears to be in the market for digital goods like games and social-network applications.
mENABLE announced that the mobile processing product it shares with its parent company, txtNation Ltd., has added several million unique transactions from the start of this year with the introduction of a new billing widget, adding further integration and payment options for websites.
Users could rely on credit or debit cards, but sending an SMS to a number is easier and less distracting, Whelan says. “It’s a lot easier to send a text message than reach for your wallet.”
Role-playing games, for example, see additional revenue from microbilling at rates as high as 90 per cent of their initial sales, while other games are generating as much as 60 per cent of their initial sales profits in micro-billing transactions.
Recently, the Financial Services Authority (FSA), responsible for implementing the European Union’s Electronic Money directive in the United Kingdom, relaxed the guidelines that determine what can be purchased via a mobile device. As a result, micro-payments are expected to steadily grow in popularity in major markets over the coming years.
TrialPay and WeeWorld chose BOKU as online payments system
“Mobile payments for digital goods is one of the fastest growing segments of mobility,” said J. Gerry Purdy, Ph.D., VP & Chief Analyst, Mobile & Wireless at Frost & Sullivan.
He adds that BOKU is clearly one of the early winners in this fast growing market with impressive customer wins and millions of transactions per month. We see billions of digital assets being purchase via mobile phone in the next few years.
In addition, BOKU announces it is going live in the next week with its payment service in Indonesia, New Zealand, Slovenia and Taiwan, bringing the company’s global reach to 55 countries.
Facebook Targets PayPal
Scott Morrison, Dow Jones Newswires, reports that Facebook might also be setting its sights on eBay Inc.’s (EBAY) PayPal online payments unit.
He adds that Facebook has accommodated more currencies, is testing new technologies and has recruited a handful of online payments specialists.
Facebook has started accepting payments in 14 new currencies, in addition to the U.S. dollar, a logical step given that more than 70% of users live outside the U.S.
This month, the company revealed it is testing a system for users to buy physical merchandise, like real roses, through Facebook’s payment platform. It also launched a test to let some users buy
Facebook Credits by billing their mobile phones.
Facebook has also hired expertise in this area, such as Prashant Fuloria, the former Google product management director who worked on Google Checkout and Ivan Kirigin, co-founder of shuttered micro-payments service TripJoy.
Analysts believe Facebook will try to establish its payment system as an on- site “wallet” and then leverage Facebook Connect — which lets people use their Facebook IDs to log into participating third-party sites – to deliver “one- click” purchasing capability across a broad range of Web sites.
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