Facebook Sets its Credits Aside to the Benefit of Local Currencies

• Facebook has decided to drop its Facebook Credits to work on a new payment system. Starting July, developers will be able to propose subscriptions relying on the social platform to their customers. The new service is currently under test with a limited number of players, including Zynga.

• Also, Facebook, praising higher scalability and a case-by-case approach, announces it will soon be accepting local currencies instead of Credits (as of Q3 2012 for Dollars, Pounds and Yens, for example). The transition toward this new model will be phased in until the end of the year. Users should not notice any changes: their balances will be converted and their gift cards can still be credited to their accounts. Facebook’s commission rate charged on virtual goods sales will remain unchanged (30%).

Source: Facebook Blog

• This turn may come as a surprise as, yet recently, the social network seemed to be working on making its Credits available at length in the physical world (see December 2011 Insight) and on means for developers to customising them (see January 2012 Insight). In addition, starting last years, developers were compelled to opt for Facebook Credits as their virtual currency.

• Facebook derives 15% of its revenue from payments with 900 million subscribers, including 500 million active mobile users. Which explains why the network also shows faith in this medium to grow with for instance its newly opened App Center (see June 2012 Insight). It obviously has been looking for ways to optimising digital contents’ sales.

• We shall remind that in the end of 2011, rumour had it that Facebook might be wishing to get involved in the online gambling sector and the use of “real” currencies on its platform was very much debated (see November 2011 Insight).

• Facebook’s main rival, LivingSocial, explains for its part it does not intend to launch its own payment system and prefers focusing on loyalty-related services for small local merchants.