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Saturday, Apr 02, 2011

Gulf News

Dubai The expected boom in digital currency via handheld devices and near field communication (NFC) could be buoyed by the growing popularity of Facebook Credits.

As more telcos, mobile phone manufacturers and retailers combine forces to enable NFC-enabled phone users to pay for goods wirelessly with the swipe of their smartphones, Facebook is working to make it easier for its 500 million members to use the brand’s very own digital currency to buy goods.

Ten Facebook Credits are the equivalent of one dollar and can be purchased by clicking on the payment tab on Facebook members’ profile pages. Or credits can be purchased via gift cards sold at major US retailers such as Wal-Mart and Target.

Jonathon Fisher, head of global consumer finance research at Euromonitor International, said in a report that “Facebook Credits have the potential to become the official currency for the internet in a way that no other virtual currency before it could ever do.


“Facebook is pushing it as the one-stop currency for members to purchase on-line games and applications on its network without the hassle of exchange rates across the world. That is important given that about 70 per cent of Facebook’s 500 million users live outside of the US where the network was founded in 2004.”

Fisher told Gulf News from his Chicago office said that Facebook could very well push its own credits into the international realm where other similar internet currency bids failed because Facebook has unsurpassed clout on a global scale.

Facebook is “way ahead of the game. It’s about leveraging these [500] million users — or roughly the population of Latin America — and demonstrating added value in purchasing lifecycle to them.”

Facebook’s platform marketing manager Deb Liu said since its formation in May 2009, Facebook Credits as a virtual currency are used primarily by gamers.

“People enter their payment information once and can buy, earn and spend safely across lots of different games,” Liu said. “Facebook Credits is currently used in more than 350 applications from 150 developers representing more than 70 per cent of virtual goods transactions volume on Facebook.

“Many of our partners have seen great results so far with Facebook Credits, including Zynga, Playfish, CrowdStar, Digital Chocolate, PopCap, Arkadium and others.”

Euromonitor’s Fisher, meanwhile, believes it may only be a matter of time before Facebook Credits will be used to buy physical goods in person at real world stores such as Wal-Mart and Target.

“I absolutely see Facebook Credits extending beyond the gaming environment,” Fisher said, noting there are already signs of third-party companies distributing goods for virtual currency. “For example, the deal with Warner Bros to allow users to rent movies via Facebook movie pages and pay with Facebook Credits demonstrates an early foray into extending the reach of their digital currency,” he said.

Looking ahead

“A future Facebook payment system would most likely allow for purchases both online and at the point of sale. Using Facebook Credits, an individual could one day walk into a retailer and use their NFC-enabled mobile phone to purchase goods. Facebook could combine payments, loyalty, discounts and viral marketing all delivered via a mobile phone.”

By Derek Baldwin Business Features Reporter

© Gulf News 2011. All rights reserved.

From www.zawya.com