23 October 2014

Facebook performs virtual currency about-turn; abandons Credits

20 June 2012  |  6855 views  |  2 cash

Facebook is to abandon its Credits virtual currency platform in favour of a system which allows developers to be paid in a local currency of their choosing.

The move to phase out Credits was posted on Facebook's developers blog, catching social media watchers by surprise. The mandatory introduction of Credits as a universal currency across the social network last year was viewed as a significant plank in the company's plans to extend its remit into the payments business.

In practice, however, the roll-out of Credits has slowed uptake of gaming applications, requiring users to switch in and out of multiple currency options - from US dollars, to Credits and back again to in-game currencies - and adding new layers of friction to the monetisation of developer applications. Removing Credits from the mix streamlines the payments process and provides more stable options for developer pricing, with Facebook continuing to rake in a 30% cut on all sales.

Beginning next month, developers will be able to accept local currencies for in-app payments - as well as take subscriptions - with Facebook Credits being phased out completely by the end of the year.

In its message to developers, the company says: "Since we introduced Credits in 2009, most games on Facebook have implemented their own virtual currencies, reducing the need for a platform-wide virtual currency. By supporting pricing in local currency, we hope to simplify the purchase experience, give you more flexibility, and make it easier to reach a global audience of Facebook users who want a way to pay for your apps and games in their local currency. With local pricing, you will be able to set more granular and consistent prices for non-US users and price the same item differently on a market-by-market basis."
KeywordsSOCIAL MEDIA

Comments: (2)

Masha Cilliers - Payment Options Ltd - London | 20 June, 2012, 13:09

Indeed an interesting turnaround, which is proving that even with as much brand presence as Facebook has, cusotmers and merchants may still chose to use the payment instruments which they prefer over the ones that are being mandated on them.  I think it's a good move, meaning facebook can focus on its core strenghts and let the retailers choose what they prefer locally.  Emoney regulation and licencing might have had something to do with this decision also..

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Keith Appleyard - available for hire - Bromley | 20 June, 2012, 19:39

Not only that but it attracted fraudsters.

One of my over-60 employees who swears she has never used Facebook in her life found that her Business Mastercard had been used 5 times in 1 month to purchase Facebook Credits in USA & Ireland.

But by the time the Card Statement arrived, Facebook must have detected them or been forewarned, because 4 of the 5 transactions had been reversed out, and when I contacted Facebook about the 5th (Facebook insists you have to have a Facebook Account in order to complain about rogue card transactions - how illogical of them) they reversed it out within 24 hours - but it must have been a right pain for them.

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