Confirmed: Facebook to Launch Virtual Currency Test in Platform Applications Soon
Over the last couple of days, rumors have been swirling about a possible Facebook Platform payments system launching over the course of the next few weeks. Tonight, we have confirmation from Facebook that while it isn’t planning on launching a new payment service for applications in the short term, it is planning on starting an alpha test to let users spend Facebook credits in Facebook applications in the next few weeks.
Currently, users buy Facebook credits (Facebook’s virtual currency) in the Facebook Gift Shop in order to buy virtual gifts to send to their friends. In the alpha tests that Facebook will start running soon, users will then also be able to use Facebook credits to make purchases inside Facebook applications and games. Developers who accept Facebook credits will subsequently be reimbursed by Facebook for the currency spent in their applications we assume, though Facebook hasn’t shared any more details on reimbursement rates or how exactly the program will work yet.
While there has been much speculation about Facebook’s virtual currency roadmap, this is the first time Facebook has confirmed plans to test the beginnings of what some have called a “universal” virtual currency system. Such a system could be a powerful revenue driver for the company, which to date has largely abstained from directly monetizing the sea of applications running on the Facebook Platform. Estimates from executives at top Facebook application and monetization companies we’ve spoken with estimate that between $300 – $500 milion in transactions will happen inside applications on the Facebook Platform in 2009, numbers corroborated by other reports. Global social network Hi5 launched a similar universal virtual currency program in March for developers on the hi5 Platform.
However, at this time it appears Facebook is not preparing to launch new payment services for application developers. When the new tests launch, Facebook credit payments are still likely to continue to happen inside the Facebook Gift Shop or another proprietary Facebook account management page. Currently, Facebook only accepts credit card payments (Visa, MasterCard, and American Express), but there’s nothing to say that Facebook itself won’t begin accepting payments through additional payment providers in the near future in order to be able to accept money from its increasingly global audience.
How does the Facebook credits test affect other virtual currencies operating inside the Facebook Platform? Clearly, a platform-managed virtual currency presents a long term challenge for companies like Spare Change (recently acquired by PlaySpan) who have created alternative virtual currencies for applications. Facebook credits are usable elsewhere throughout the site (including recent tests around currency gifting and branded virtual gifts) and bear the Facebook name, and Facebook will want to have increasing numbers of direct billing relationships with its users over time.
In the future, Facebook could theoretically expand the use of Facebook credits to any Facebook Connect application as well – not just those apps running inside Facebook. Such a system could be a way for Facebook to help publishers around the web monetize through the Facebook credits system – a big idea but clearly further down the road.
For now, Facebook is just starting an alpha test with a few developers. We’ll let you know how it goes.
May 12th, 2009 at 7:06 pm
[...] Update: Facebook has confirmed that it will be starting an alpha test to let users spend Facebook credits in Facebook applications in the next few weeks. More details here. [...]
May 12th, 2009 at 8:21 pm
Will they connect this payment platform to Facebook Connect?
May 12th, 2009 at 8:43 pm
Connect, I think that’s a very interesting question!
May 13th, 2009 at 6:09 am
[...] alpha test to let users spend Facebook credits in Facebook applications in the next few weeks. Confirmed: Facebook to Launch Virtual Currency Test in Platform Applications Soon 1 [...]
May 13th, 2009 at 7:45 am
Watch out when this becomes part of FB Connect; it will threaten PayPal (also Google and Amazon payment systems) and the credit card companies with respect to Internet and mobile eCommerce.
This could potentially be the most radical move FB has done so far (if they are smart enough to exploit its potential, that is).
May 13th, 2009 at 8:18 pm
[...] Inside Facebook confirm rumors of Facebook testing a new virtual currency. Have we seen something like this before? A closed system, with lots of new people interacting with no real purpose –just sharin’ — and exchanging money for virtual goods? Well, yes we have, remember SecondLife? Of course, Facebook is way easier to use and much more popular. [...]
May 14th, 2009 at 6:06 am
This is a defining moment for Facebook. The Virtual Currency application holds the promise of becoming the cash engine that will sustain and grow the platform in the future.
DigitalEcologist, you obviously don’t know much about Second Life. Unlike Facebook, Twitter, MySpace and the majority of other Social Networks, Second Life is in the black and growing profitably. It is the active (purpose driven) formal involvement of hundreds of universities, businesses and government agencies that is making this particular “closed system” (economy) the envy of many 1st Life economies worldwide!
May 14th, 2009 at 11:09 am
[...] this week, Facebook confirmed to Inside Facebook that it is launching an alpha test integrating its virtual currency with Facebook Platform application develope…. However, that effort has yet to [...]
May 14th, 2009 at 12:10 pm
[...] Note: Earlier this week, Facebook confirmed to Inside Facebook that it is planning to launch an alpha test of its virtual currency, Fa… in the next few weeks. Under the test, application developers will be able to accept Facebook [...]
May 14th, 2009 at 1:11 pm
[...] could make up to $500 million in revenue this year, mostly through virtual goods, as we and Inside Facebook have reported. Facebook, and other companies like MySpace, have yet to make serious money from the [...]
May 14th, 2009 at 1:11 pm
[...] could make up to $500 million in revenue this year, mostly through virtual goods, as we and Inside Facebook have reported. Facebook, and other companies like MySpace, have yet to make serious money from the [...]
May 14th, 2009 at 1:59 pm
[...] will reportedly begin testing a payments system in the coming weeks. This will start with a few developers, [...]
May 15th, 2009 at 8:05 am
[...] module reportedly begin investigating a payments grouping in the reaching weeks. This module move with a whatever [...]
May 15th, 2009 at 1:37 pm
[...] Facebook plans to launch early tests of its virtual currency, Facebook credits, with Platform application developers in the next few [...]
May 19th, 2009 at 2:00 am
[...] Facebook in naher Zukunft vom Allheilmittel “Werbung” langsam distanzieren und eine eigene Micropayment-Lösung in Angriff nehmen. Die Idee dahinter: die Hemmschwelle zum Geldausgeben mindern. Praktisch sieht [...]
May 19th, 2009 at 12:15 pm
[...] What are your thoughts on Facebook’s upcoming virtual currency test? [...]
May 19th, 2009 at 3:18 pm
[...] join a virtual table and enjoy casual poker with friends or strangers. Both games incorporate virtual currency into the experience, inviting users to display their competitive energies in the context of a [...]
May 20th, 2009 at 6:20 am
[...] More details on Inside Facebook. [...]
May 20th, 2009 at 9:11 am
[...] but alas, I lost it. CNN has an article about Facebook’s virtual currency plans, which are already moving into alpha. Facebook is researching the idea of creating a unified currency but is “very early” in [...]
May 20th, 2009 at 11:30 am
[...] What challenges might Facebook face in launching its own a virtual currency system? [...]
May 21st, 2009 at 10:23 am
[...] it’s confirmed that Facebook is launching its own virtual currency test for applications. [...]
May 22nd, 2009 at 11:55 pm
[...] will reportedly begin testing a payments system in the coming weeks. This will start with a few developers, [...]
May 25th, 2009 at 2:12 pm
[...] Facebook confirmed to Inside Facebook that it is starting to test integrating its virtual currency, Facebook credits, with Platform applications. Do you think it makes sense for Facebook to be the one handling currency payments in the long [...]
May 26th, 2009 at 3:25 am
what are the payment cycles to “merchants” for this? i hope it will be around 30days (like Google Adsense pays its publishers)
May 26th, 2009 at 7:31 am
[...] will Facebook’s entry into virtual currency affect your [...]
May 26th, 2009 at 4:55 pm
[...] have integrated Facebook credits. Facebook confirmed to us two weeks ago that it will start running virtual currency integration tests with application developers [...]
May 27th, 2009 at 12:03 am
[...] launch of the Facebook Platform, had to quell – and then acknowledge – rumours about a Facebook payment platform, and totally redesigned Facebook to resemble a twitter [...]
May 27th, 2009 at 11:05 am
[...] Facebook was smart to hold firm with this lawsuit, which sounded, at best, gimmicky. But we do think this news is important for the mere reason that the stakes for protecting Facebook’s users could increase as people start making more monetary transactions over the platform through Facebook credits (which Facebook says it will start testing soon). [...]
May 27th, 2009 at 2:37 pm
[...] “merchant” program. Just two weeks ago, Facebook told us that it was beginning an “alpha test” to integrate its virtual currency with Facebook Platform [...]
May 29th, 2009 at 9:00 am
[...] the Facebook Platform economy is estimated to be doing close to $500 million annually, and a robust ecosystem of developers, ad networks, and virtual currency monetization and payment [...]
May 29th, 2009 at 5:32 pm
[...] revenue increases for Facebook. With the Facebook Platform economy estimated to be potentially as high as $500 million in total transaction values this year, Facebook could potentially add several million dollars to the bottom line simply by capturing a [...]
June 4th, 2009 at 12:42 pm
[...] And fill the void they have – a robust ecosystem of advertising networks, virtual currency monetization platforms, and payment providers have pounced on the opportunity. Industry executives estimate the Platform e-commerce market could reach between $300 – $500 million in 2009. [...]
June 9th, 2009 at 7:33 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 9th, 2009 at 7:40 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 9th, 2009 at 7:43 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 9th, 2009 at 7:43 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 9th, 2009 at 7:50 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 9th, 2009 at 9:41 pm
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 10th, 2009 at 7:20 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 10th, 2009 at 7:29 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 11th, 2009 at 12:25 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 11th, 2009 at 12:26 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 11th, 2009 at 12:28 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 11th, 2009 at 12:35 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 11th, 2009 at 4:58 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 11th, 2009 at 11:57 pm
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 12th, 2009 at 8:35 am
[...] this in mind, when it was announced last month that facebook was working on launching a micropayment system, I got pretty excited. So excited, in [...]
June 12th, 2009 at 8:43 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 12th, 2009 at 8:59 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 12th, 2009 at 9:02 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 12th, 2009 at 9:22 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 12th, 2009 at 9:27 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 12th, 2009 at 9:30 am
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 15th, 2009 at 10:48 pm
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 15th, 2009 at 10:53 pm
[...] Facebook is clearly going to test some form of virtual currency in the next few weeks, in the hopes of finding new ways to monetize its more than 200 million active users. [...]
June 23rd, 2009 at 1:33 am
[...] running on the Facebook Platform,” wrote Inside Facebook’s Justin Smith, in a post Tuesday about Facebook’s plans to trial its virtual currency in apps. Indeed, the company has [...]
June 26th, 2009 at 6:00 am
[...] providers like Social Gold, Spare Change, Zong, or Boku – or the social networks themselves. (Facebook recently started testing a payments program for developers, and MySpace has said it plans to do the same later this [...]
July 4th, 2009 at 12:14 am
[...] 今年5月份，曾经有报道说Facebook开始测试他们的支付系统，最近他们似乎加紧了脚步——Facebook最新任命了他们的Facebook payment产品管理总监：Prashant Fuloria。Prashant Fuloria此前在Google担任Google Checkout的产品管理总监职务，他在Google工作已经超过6年。 [...]
July 7th, 2009 at 1:55 pm
[...] running on the Facebook Platform,” wrote Inside Facebook’s Justin Smith, in a post Tuesday about Facebook’s plans to trial its virtual currency in apps. Indeed, the company has [...]
July 22nd, 2009 at 5:11 pm
[...] be the subject of another post. But for now the developments to watch are the competition between Facebook and MySpace in their own virtual currencies, app developer currencies from companies like Zynga, [...]
August 25th, 2009 at 2:44 pm
[...] Facebook transaction value estimates here. [...]
September 18th, 2009 at 1:23 am
[...] on its platform — we have separately heard virtual goods revenues could account for more than $300 million in platform revenue this year, money Facebook isn’t seeing any [...]
July 22nd, 2010 at 12:01 pm
[...] first launched Credits, its own in-game virtual currency, for externally developed applications in May of 2009, app developers have been worried about the potential the hefty 30 percent fee Facebook charges for [...]
July 25th, 2010 at 1:41 am
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.
September 29th, 2010 at 6:04 am
Facebook plans to launch early tests of its virtual currency, Facebook credits, with Platform application developers in the next few