PayPal Donations is a very nice way to let people donate a small amount of your site, usually as a thank you for providing quality information, tips or advice.  You can use this to collect donations from a PayPal Donation button on your website, or even using it as a link in your email. PayPal won’t automatically place the button code on your website, but it’s very easy to copy and paste the code into your blog or website’s code. The PayPal Create Button designer screen also lets you customize the look and field of the button, set-up  donation amounts, currency types, and other options. You can also create a library of buttons and re-use these rather than starting from scratch every time.

How To Add a PayPal Donation Button To Your Blog?

Benefits

• Easy to implement – no programming experience necessary. Just copy and paste the code.
• No up-front costs – same low fee schedule as other PayPal payments
• No hidden charges – PayPal don’t charge for this service. There are no hidden costs
• Reports – PayPal maintains detailed transaction records so you can track your donations
• Flexibility – your donors can choose to give an amount of their choice
  (recommended) or you can set a fixed amount

To add PayPal Donations to your website, follow these steps:

The webpage you use to design the buttons has three sections. You only need to use the first one: the others are optional.

1. Choose the button type and enter the payment details

2. Save your button (an optional step)

3. Customize the advanced features (also optional)

Let’s get started.

1. Log in to PayPal or setup a new account.

2. Click the Profile tab.

The Profile Summary page opens.

3. Under Selling Preferences, click the My Saved Buttons link.

The My Saved Buttons page opens.

4. Click Create New Button.

The Create Payment Button page opens. This is where you will create the actual button.

How to Choose the button type and enter payment details

Let’s get started and choose the button type we want to use.

1. In the Accept payments for dropdown menu, select Donations.

2. In Organization name/service, enter the name of your organization

3. In Donation ID (optional), enter a unique number if you want to track the donation.

The next step is to customize the button. In other words, do you want a simple image with only the word ’Donation’ or do you want to add credit cards to it?

You can also upload your own image, which can be useful if you want to blend it into your site’s color scheme.

4. Click the blue triangle next to Customize appearance.

5. Click the PayPal button box.

You now have two options:

• Customize the PayPal button or
• Upload your own.

6. If you want to customize the PayPal button:

6.1 Click Use smaller button – if you want a Donate button without any branding or credit card logos.

6.2 Click Display credit card logos – if you want display credit card logos such as Visa and MasterCard.

6.3 Select the Country and language for button.

FYI: I recommend United States – US – English.

When you change the settings, a preview of your image appears in the Buyer’s View pane.

7 If you want use your own image.

7.1 Click Use your own button image.

7.2 Enter the URL of where your image is located on the web. At the moment, you can’t upload an image to PayPal directly.

Note: PayPal will not show your image onscreen when you use this option. But, when you create the code later on, it works fine. You can always go back and change it, by the way.

Next you’re going to select the currency.

8. Choose a Currency from one of these:

USD AUD GBP CAD CZK DKK EUR HKD HUF ILS JPY MXN NZD NOK PLN SGD SEK CHF.

Again, most of you will select USD (US Dollars but you can choose what you want).

Tip: If you choose a currency other than USD you run the risk of people not making a donation. People don’t want to get tricked into paying with a currency they don’t understand. If you make them go check the currency rate, they might have second thoughts on paying.

Keep it simple. Use the USD option.

Next up is the contribution amount.

9. In Contribution amount, select one of the options:

9.1. Click Donors enter their own contribution amount.

Let people choose to donate 1 dollar of 1 million. It’s their choice. Never under-estimate how generous people can be if you provide really useful content (like this!)

9.2. Click Donors contribute a fixed amount.

I’d avoid this. It’s a bit ham-fisted and forces people to pay when you think they should, under-mining the principle of making a donation.

To me, this looks more like a pseudo-payment. I’d suggest you avoid it. But, hey, it’s your site. Don’t let me stop you.

10. Next, enter the email address where the donations are sent to. Usually you’re PayPal account email address.

Step 2 and 3 are optional, so you can ignore these for now. Take a peek if you want or you can skip ahead and create the button.

The final step is to get the code for the button.

11. Click Create Button at the end of the screen.

This opens the Button Code page.

12. Click Select Code to select the HTML code.

13 Copy the code (CTRL+C for Windows and CMD+C for Mac)

14. Paste the code into your blog or webpage (Ctrl + V)

We’re not finished yet!

15. PayPal also gives you the option to add the button to emails. Fantastic if you’re selling things via email or are big into good ol’ web marketing.

Just copy and paste the link into your email. Send a few tests to yourself to check that it works. Also try the link in Yahoo, Gmail and Hotmail to check that everything works fine with these.

Now you’re finished!

Other things you can do on this page

• Click Create Similar button if you want to use the button you just create as a template for your next button. Nice time-saver as you can use the same configuration settings.
• Click Create a new button to create a new button from scratch.
• Click Create Similar button if you want to create another button, with all the same/similar configuration settings as this button

I hope you enjoyed this article and that is made the whole process of creating PayPal buttons a little easier.

Next week, I’ll show you how to use more advanced features in PayPal, like setting up a Thank You page or sending customers to a download page automatically.

PS: Click Here to Setup a Free PayPal Account

Patrick Hoge, writing in the San Francisco Business Times, reports that Second Life “residents” have spent more than $1 billion in transactions to date and spent 1 billion hours logged into this virtual world.

Facts

1. In 2008, Second Life users spent $360 million on virtual goods ranging from land (virtual real estate) to designer shoes to stylish homes.

2. Second Life’s economy almost doubled in size – 94% up – between the Q2 2009 and Q2 2008.

3. User-to-user transactions now amount to nearly $50 million per month, according to a Linden Lab press release.

4. Subscribers has spent 115,000 years in Second Life socializing, attending concerts, creating, selling and shopping for virtual goods, learning languages, attending business meetings etc.

5. User hours grew 33% year-over-year to an all-time high of 126 million in Q2 0009

6.  Second Life residents spend an average of about 100 minutes “in world” per visit.

How does Second Life make money?

A basic account in Second Life is free.

Linden Lab, the developers of Second Life, make money by selling and renting virtual real estate.

They also offer premium memberships and charging fees on sales of Linden dollars, the currency used online. 276 Linden dollars is approx 1 US dollar.

Second Life residents — members are from 200 countries — create more than 250,000 new virtual goods every day, such as clothing, vehicles, buildings and other digital goods such as language translators and consultancy services.

Link: http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2009/09/21/daily24.html

Viximo, a developer of virtual goods solutions for social networking sites, has partnered with Fotolog, the world’s most popular photo-blogging site. Fotolog intends to use Viximo’s technologies to offer virtual goods to its 27 million members.

How does it work?

Viximo’s software will provide a virtual gifting experience for Fotolog’s users in combination with Viximo’s Content Marketplace.

Fotolog’s storefront will include an inventory of premium content including licensed content from brands, celebrities, and musicians.

Virtual Goods Software Applications

Viximo’s solutions are designed to help social networks/gamers sites launch or grow a virtual goods business including:

Analytics

Micropayments

Content

Viximo claims to be the only complete virtual goods solution for social networking, online dating, and casual gaming sites.

Links

http://viximo.com and http://www.fotolog.com

Reuters note that Asia is also a playground for a range of virtual business models such as rentals.
Georgina Prodhan and Tarmo Virki report that, Cyworld rents background skins of popular South Korean baseball players for limited periods.

These rentals drive repeat sales and tap into trends.

Asian social networking sites allow users to chat, play games and share photos with some advertising thrown in.

But most of their revenues come from users, who are “represented by avatars and acquire virtual currency from the sites to buy digital goods, game packages or upgrades.”

How western SNS make money

• Habbo sells virtual clothes and furniture.
• Pet Society, which is available on Facebook, let you raise virtual pets and sell virtual pet accessories and e-food.
• With 7 million inhabitants, Second Life offers e-wares for sale for Linden dollars, the in-game virtual currency.

“They were all blown away even though some of them already knew about what was going on here,” said George Godula, founder of consultancy Web2Asia. “They (Asian social networking sites) are quite nimble at finding out business models or ways of how to make money,” he told Reuters.

Link: http://www.nytimes.com/reuters/2009/09/08/technology/tech-us-asia-socialnetworking.html

According to a new report, the median average expenditure in online gaming was highest among Free to Play games ($75), followed by MMOs ($60) and Social Networks ($50) respectively.
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The average user plays three online games. 80% report buying digital goods for their own use while 20% said they purchase for gifts.

VGMarket report that:

• 58% of online gamers made purchases in Free to Play (F2P) games over the last 12 months
• 34% of buyers making purchases in MMOs (massive multiplayer online games) and
• 23% having made purchases in Social Network games over the same time period.

F2P games are also enjoying the highest spend.

In addition, the study found that the median number of transactions were higher for virtual currency (7), than for any other type of digital goods.

“Each type of digital good has a unique level of demand, and the amount of money that a consumer spends on digital goods varies significantly by the genre of the game,” said Michael Gluck, President, VGMarket. “Publishers can use this insight to forecast revenue, make the right development investments, and effectively allocate marketing dollars.”

The survey was comprised of 2,425 respondents from across the PlaySpan Marketplace, Spare Change, and Ultimate Game Card.

For those interested in buying and selling virtual currencies, let’s look at how the process works on the Ven site. This articles also asks if this virtual currency is pegged to the US Dollar?
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Eric Harris-Braun asks on Ven’s social currency board, “I’d love to know about the rules that Hub Culture has defined for Ven. It appears that some are issued when they are purchased, and others just for joining.”

http://www.hubculture.com/groups/237/discuss/415/

One of other questions he has is if there are redemption rules. In other words, rules on the issuance limits that hub culture has set for itself?

Stan Stalnaker, from Ven, clarifies:

There are two sources of Ven

1.  It can be purchased at floating exchange rates pegged at 10 to the dollar, and

2  It can be earned by inviting friends into the network.

Right now, these are the only sources of Ven on a macro level.

At the micro level, you can collect or earn Ven by helping others in the network, e.g. through the knowledge platform and the ability to exchange with those in your network.

Redeeming virtual currencies

You can redeem Ven in Hub Culture stores worldwide. The site adds that ”products and services in Ven are carefully curated according to Hub Culture standards in design, sustainability and more.

Is this virtual currency pegged to the dollar?

Not necessarily, it seems.

Again according to Stan, it may move to a basket of currencies and possibly even commodities at some point, but we expect the net preset value of Ven to remain constant, especially when used within the community.

Learn more about Ven at http://www.hubculture.com/ven

The Social Gaming Summit 2009 (Friday, October 30, 2009) is a one day event focused on the intersection of games and the social web.

This year’s event will focus on helping social games developers build, monetize, and grow their social games.

It aims to bring together the leaders in free-to-play games, social networking, and payments infrastructure for a full day of panels and talks.
The Virtual Goods Summit 2009 is hosted by Charles Hudson, VP of Business Development for Serious Business. Charles was formerly the Sr. Director for Business Development at Gaia Interactive. Prior to Gaia, Charles worked at Google. http://www.charleshudson.net/join-us-for-the-3rd-annual-virtual-goods-summit

Confirmed Speakers and Panelists

• David Wallerstein, Tencent
• John Earner, Playfish
• Bill Wang, Perfect World
• Tim Chang, Norwest Venture Partners
• Jameson Hsu, Mochi Media
• Brian Balfour, Viximo
• Adam Caplan, Super Rewards
• Amy Jo Kim, Shufflebrain
• David Marcus, Zong
• John Smedley, Sony Online Entertainment
• Zhan Ye, GameVision
• Ron Hirson, BOKU
• Siqi Chen, Serious Business
• Shanna Tellerman, Wildpockets
• Geoff Cook, MyYearbook
• Lisa Rutherford, TwoFish
• Robin Chan, XPD Media
• Dave Etling, InComm
• Ludovic Bodin, CMUNE

It will also offer a half-day seminar designed to provide an overview of the key fundamental drivers of virtual goods business models.

Topics range from why virtual goods are effective to the ins and outs of managing a virtual economy.

Topics include:

• Virtual Goods – Why and How They Work
• Getting Started with Virtual Goods and Virtual Gifts
• Launching Your Virtual Currency – A Case Study
• Managing and Marketing a Virtual Goods Offering
• Managing a Virtual Economy – What You Need to Know
• The Payments Landscape – Virtual Goods Payment Options
• Optimizing Your Payments Infrastructure – A Publisher Case Study

Register

Westin Market Street, San Francisco, CA

Website: http://www.vgsummit.com/2009

Reuters report that Asia’s social networking sites appear to have solved found lucrative ways to leverage profits from their online gamers. 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.

Georgina Prodhan and Tarmo Virki report that “Of the virtual sales in Asia, about 80 percent 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.”

Such is the success of virtual sales on Asia’s social networking sites that the likes of Facebook are looking at the potential virtual money can generate.

Takeaways

To put this in perspective:

• Qzone’s Tencent Holdings made over $1 billion last year with just 13% coming from advertising revenue.
• In contrast, Facebook and Myspace depend on advertising to fund most of their revenue.
• Cultural issues. Gaming is popular among adults in Asia; in the West it mostly for kids.
• Status. Asian societies are very status conscious. No one wants to have an avatar with last year’s bling.
• Asia’s social networking sites are country specific but have very active user bases.

Stats

• Qzone had 228 million active user accounts for Q2 2009.
• Cyworld had 23 million unique visitors per month at the end of the Q1 2009.

Link

http://www.nytimes.com/reuters/2009/09/08/technology/tech-us-asia-socialnetworking.html

~~~

Kim-Mai Cutler reports that Whuffie Bank wants to build a virtual currency based on reputation that can be redeemed for goods and services.
Whuffie is based on the currency in Cory Doctorow’s novel “Down and Out in the Magic Kingdom” where goods are abundant and scarcity has ended.

To use the app, log-in using Twitter and Facebook, and The Whuffie Bank assigns you a ranking and a number of “Whuffies” based on your network.

For example, the more retweets you get, the higher your reputation becomes or the more followers you have, the “richer” you become.

Venturebeat: http://digital.venturebeat.com/2009/09/15/tc50-whuffie-bank-wants-a-new-currency-based-on-social-reputation/

Doug Herman notes that while western social networking platforms like Facebook are considered distinct businesses from virtual worlds such as Second Life and There.com, in Asian, the two businesses are more integrated and provide leading social networking companies such as South Korea’s CyWorld, with very profitable revenue streams.
How does the Asian Virtual Goods Business Model work?

According Plus Eight Start, “Asians spend around US$5 billion a year on virtual goods purchases such as items to improve their capabilities in casual games and items to improve the look and status of their online avatars.”

The money represents around 80% of the total global market for virtual goods.

How does it differ from the west?

Two differences are 1)  that game players don’t have to spend much money or 2) pay a subscription fee upfront.

Doug highlights that instead, the Asian business model leverages “a large user base which views opportunities to improve their online “look”, experience or capabilities as worthy of a small investment especially when they view their online persona as a status proxy among their friends.”

“Social networking is just a way to get people together, but if you want revenue you have to sell them something. What [Asian social networking companies] found was that people were happy to pay for content related to emotion, status and entertainment. They  keep growing even though the economy’s bad because they keep making millions from [pennies] from millions and millions of people.”, Benjamin Joffe, Founder & CEO, Plus Eight Star.

Takeaways

1. Virtual goods sales in Asia is partly due to the lack of a sophisticated online ad market.

2. However, their alternative business model may be more instructive to Western social networking companies that struggle to develop a profitable revenue stream solely through advertising.

3. Recently Facebook has been developing their own virtual currency platform, dubbed ‘Facebook Credits‘.

4. Facebook already sells virtual goods and has implemented its own credits system to enable the purchases. Soon it may expand its system to push its virtual currency out to third party websites and application developers.

5. Asian teenagers also ‘rent’ virtual goods, such as skins, backgrounds and other items. This lets them bling up their web persona without paying the full amount. If they like the item, then they may but it.

Read more here: http://www.digitaleastasia.com/2009/09/14/will-the-asian-virtual-goods-business-model-gain-traction-in-the-west/

~~~

Kevin Alderman, who sells virtual goods in Second Life, has sued Linden Lab for allowing other to sell his products without his permission.
The lawsuit alleges that Eros’s virtual goods sold for use in Second Life have been counterfeited and cloned by numerous Second Life residents.

Shannon Grei, who sells virtual clothing, has joined in the lawsuit alleging that Linden Lab infringes her copyright by allowing other marketers to sell fake versions of her designs.

Making Real money for Virtual Foods

To put this in perspective.

Alderman has made more than $1 million by selling products such as virtual beds, which cost $20 to $40.

MediaPost (http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=113576) report that Alderman and Grei believe that “Linden Labs should be held responsible for the knock-offs because the site allegedly allows users to upload fakes, sell them for Linden currency, and facilitates the exchange of Linden dollars for U.S. currency.”

Lawsuit Allegations

The allegations are that Linden Lab has created in Second Life a system in which it:

1. Directly engages in piracy
2. Actively allows users to engage in piracy by providing tools
3. Profits from its own piracy and the piracy of its users

Linden Lab faced similar allegations in two prior lawsuits; neither resulted in substantive court rulings.

Realtime Worlds is to adopt an alternative “traditional monthly subscription model” with its upcoming MMO APB. The game’s web site confirms the adoption of a non-traditional revenue model, although it side steps giving details of the terms of payment.
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Billing services and fraud management

Worldsinmotion.biz report that Vindicia is to provide billing services and fraud management and its Cashbox solution will allow the game to support multiple numerous revenue streams, including subscriptions as well as virtual goods and currencies, and guard against customer fraud.

Realtime Worlds  called online games “particularly vulnerable when it comes to fraudulent activity,” across a variety of types of fraud, including “friendly fraud” by way of chargebacks.

APB will support varying currencies worldwide, as well as player communication in numerous languages.

Realtime Worlds is to adopt an alternative “traditional monthly subscription model” with its upcoming MMO APB. The game’s web site confirms the adoption of a non-traditional revenue model, although it side steps giving details of the terms of payment.
[ad#black]
Billing services and fraud management

Worldsinmotion.biz report that Vindicia is to provide billing services and fraud management and its Cashbox solution will allow the game to support multiple numerous revenue streams, including subscriptions as well as virtual goods and currencies, and guard against customer fraud.

Realtime Worlds  called online games “particularly vulnerable when it comes to fraudulent activity,” across a variety of types of fraud, including “friendly fraud” by way of chargebacks.

APB will support varying currencies worldwide, as well as player communication in numerous languages.

Mark Hefflinger reports that, as online gaming companies explore how virtual goods can leads to revenue generation, a new survey shows that, “free-to-play games attract the greatest number of virtual goods buyers, and that virtual currency is the most popular purchase.”
VGMarket performed the report on behalf of micropayments firm PlaySpan. It polled 2,425 users of PlaySpan’s Marketplace, Spare Change and Ultimate Game Card products.

Survey result s

• 58% of gamers
• 34% of massively multiplayer online game players and
• 23% of social network game players

have made virtual goods purchases in free-to-play games over the past year

Top selling virtual goods

The most popular virtual goods were

• 71% – In-game virtual currency was the most popular purchase followed by
• 37% – weapons
• 30% – subscription codes
• 26% – wearable items
• 25% – power-ups
• 19% – virtual gifts

Mark adds that “The median purchase in free-to-play games was $75; the figure was $60 for multiplayer titles, and $50 for social network games.”

Links:

http://corp.playspan.com
http://www.vgmarket.com
http://www.dmwmedia.com/free-play-web-games-see-most-virtual-purchases

KZero expect growth in virtual worlds come from multiple areas, such as education and older age ranges will supplement KT&T (kids, tweens and teens) and social networking extension from ‘pages to places‘.

It forecasts that in:

• 2009 revenue forecast (in USD) is $2bn
• 2012 there will have 900 virtual worlds
• 2009 to 2011, Kzero predict a yearly increase of $1bn

These numbers include revenues from premium subscriptions, marketing placements in-world/on-site, microtransactions from virtual goods and those in the supply chain (e.g. service providers, server/bandwidth etc).

From 2009 to 2011, Kzero predict a yearly increase of $1bn, driven by brands investing in Virtual Worlds and an uptake in microtransactions.

Easier payment mechanics such as SMS and pre-paid cards will lower the barrier for conversion for virtual worlds as will the “perceived value of virtual worlds (from parents) will assist in the revenue growth.”

Full report at: http://www.kzero.co.uk/blog/?p=2845

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.

If you have any other Virtual Currency News, please send it in.

Thanks

Come2Play Tokens is a new virtual currency platform that splits revenue between publishers and game developers.

Revenue is generated through the purchase of tokens integrated into every game on Come2Play’s Multiplayer Gaming Network. In addition, Come2Play shares in-network banner advertising revenues – giving publishers and developers a full monetization package.

How it works

1. Players challenge each other using virtual tokens.
2. The winner of the game wins the total amount of challenged tokens.
3. Players can use tokens to buy virtual rewards to complete reward collections.
4. Players are ranked by the number of tokens and completed collections they have accrued.
5. A player’s first token package is received for free.
6. When a player wants more tokens, they visit the Token Store and either buy tokens with cash or earn them by completing advertising offers.

The virtual token economy is built around games instead of developers building in-game features into each game.

Come2Play’s Multiplayer Gaming Network is an out-of-the-box, social gaming portal that publishers can customize and embed on their site. Come2Play Tokens and the virtual currency platform are built into every Multiplayer Gaming Network.

Additional features include a multiplayer game gallery, game rooms, chat, leaderboards, rewards and achievements.

The Multiplayer Gaming Networks can also be integrated with a publisher’s user database in order to keep player’s profiles and token balances intact. Game developers are automatically added to the revenue share program when their game is uploaded to the Come2Play platform.

More: http://www.come2play.com/

The subject of virtual currencies has been covered recently in several leading magazines, such as BusinessWeek, Wired, and even CNN. While all of these have discussed the impact virtual currency may have on the internet, very few have actually defined what a virtual currency is and how it differs from a real currency.

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In the past, money (currency) was usually either gold or silver and reflected a real-world value.

However, modern currency, is essentially fiat money, and is intrinsically worthless.

The prevalence of one type of currency over another in commodity money systems has arisen, usually when a government designates through decrees, that only particular monetary units shall be accepted in payment for taxes.

Fiat money is a currency that is not convertible into a physical quantity (ie gold) but is accepted as a medium of exchange by the government. Fiat money is declared by a government to be legal tender.

This latin term — let it be done — has value only because the government accepts it and says it can be used as a “legal tender”. The 50 dollar bill in your pocket is not actually worth 50 dollars. It’s just cotton with images and other text printed on it, albeit in a very sophisticated manner.

Most of us have our own idea of what constitutes a virtual currency but let’s look at some of the ways it differs for a real currency, such as the US Dollar.

1. Inflation – most virtual currencies are not subject to inflation. In other words, the coins you buy on club penguin or World of Warcraft will have the same value in 6 months time as the date you bought them.

2. Regulation – each virtual currency is controlled by the developers and have no bearing in the real world. For now, virtual currencies, to the best of my knowledge, are not monitored by government regulators and why should they are they weren’t created as a national currency.

But this might change if these virtual currencies gain traction and begin to effect real world currencies. 

3. Liquidity – for now, it’s difficult to convert your linden dollars into US dollars, though not impossible. However, try changing Club Penguin coins into another virtual currency and you have a problem.

Of course, this presents an opportunity.

Why not setup a clearing house online where people can ‘cash in’ their virtual currency. Let’s say you no longer want use Club Penguin but have 100 USD worth of coins in there.

The virtual currency clearing house would act as a middle man and give you a percentage of the CP coins in exchange for US dollars. 

4. Exchange rates – while most leading currencies can be converted into other currencies, there is no formal exchange rate for virtual currencies. At least not yet!

This is likely to change once Google and others see the potential of controlling currencies on the internet.

Imagine a scenario where Google has greater leverage than the Federal Reserve and you see where this could go.

The Guardian newspaper has this article on the role between online gaming and virtual currencies.

The Guardian highlight that the World of Warcraft represent the next phase in human social evolution.

‘I recently described the auction website eBay as an example of the new governance structures that have emerged with the world wide web. But I knew I was stretching the argument: online game environments such as World of Warcraft are better fits for that kind of mental exercise. Although eBay has its own sovereign communication system (Skype) and currency (PayPal), the game worlds have an additional element that makes them far more powerful: community. They have people who gather and form new social orders.’

http://www.guardian.co.uk/technology/gamesblog/2009/aug/05/world-warcraft-game-theory

Zong recently secured a deal with teen virtual world Gaia Online. This lets teens and tween buy its world’s virtual currency, Gaia Gold, through the mobile payments system. Here’s how it works:
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1. When you want to cash in real money for Gaia Gold, Zong sends a number code to the your mobile (cell) phone.

2. You type in the code. The transaction is complete.

3. When your phone bill arrives, the game charges are included like any payment made to your phone bill.

Zong it seems has found a niche for users who want to make impulse purchases.

The CEO, David Marcus, gives an example: “If you want to buy a virtual penguin for two bucks, you’re not going to go to your wallet, take your credit card out and type in 16 numbers. These transactions are impulse purchases.”

Zong is closing deals with leading social networks such as Facebook and Myspace and moving into new regions including Russia and Asia.