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Facebook is aiming for a full launch of its virtual currency Facebook Credits in September, a move that could lead to it becoming the default online currency, rivalling leaders such as PayPal.
Facebook Credits is in a beta trial, but sources said the social network is aiming to roll it out to all users and developers in September. Initially, Credits will be aimed at virtual goods likes games, but will eventually let consumers buy anything, including physical goods.
Industry experts said it could provide big opportunities for brands to offer transactional services on Facebook and throughout the entire web via Facebook Connect.
Credits accounts are topped up with any credit card, and charge a merchant 30% commission.
This week, Facebook announced it would be shutting down its Facebook Gift Shop in August, which paves the way for Facebook Credits.
A Facebook spokeswoman said, “We are continuing to look at ways to extend our virtual currency via a test with several developers. The test started in May 2009 and is exploring ways for people to use their Facebook Credits with third-party applications and games on Facebook.”
The implementation of a Facebook currency would mean that the social network can roll it out using other services that connect with it via Facebook Connect and the Open Graph protocol, enabling brands to let consumers use Credits on sites outside the Facebook platform.
Henrique Olifiers, studio director at EA Interactive, owner of social gaming company Playfish, said a common currency would make it easier for consumers wanting to spend on the platform.
“At the moment our games deal with multiple payment methods, so if Credits is successful, it will provide a much less frictional way of purchasing credits,” said Olifiers. “The big opportunity lies in the Open Graph for the entire web, because I would expect Facebook credits to follow to the whole internet too.”
Jonathon Lyon, social media strategist at marketing agency Wunderman, said brands would find the best opportunity if the currency is used in Facebook Connect. “The real opportunity is within Facebook Connect. If it can integrate with that, it will mean a much broader network of sites can implement the currency.
“Another opportunity is for advertisers to incentivise people to engage by offering Credits in return for interacting with branded content or ‘liking’ the brand within Facebook,” Lyon added.
Ciaran Norris, head of social media at Mindshare, said the data Facebook has on users, combined with the ability to offer ecommerce, meant it could rival large online retailers. “Potentially, it could be a challenger to Amazon, the combination of sampling ads, which collect users’ addresses, demographic and interest targeting and the option to purchase means brands could target and recommend products.”
Since Facebook announced that it would be implementing Facebook Credits last year, many app developers have been unhappy about the proposed 30% that it plans to charge for each transaction.
Leading social gaming company Zynga, which Google bought a stake in this week (nma.co.uk 12 July 2010), reportedly generated $100m in sales last year. When Facebook implements Credits as a universal currency, it stands to take a significant piece of this lucrative market.
Henry Ellis, associate director of social media at search and social media agency Tamar, said that though Facebook could face criticisms similar to Apple’s iTunes over its 70/30 split, some suppliers have been charging more.
“Despite it angering some developers, 30% isn’t bad compared to some payment service providers,” said Ellis. “When it does become the universal currency it will spur on a lot more of the small app vendors to monetise their use of Facebook.”