Facebook set to introduce virtual currency in India

Facebook is set to move its 31-million Indian subscriber community to a new payment system called Facebook Credits next month. Facebook Credits is a virtual currency that facilitates transactions across games and apps on Facebook.

Users would now be able to feed in their payment information once and buy, earn and spend across different games or apps they use on Facebook (similar to Linden dollars in SecondLife). The move could also benefit thousands of brands that use Facebook to sell them products through their social pages.

Deb Liu, a platform marketing manager at Facebook, writes on the company’s official blog, “Facebook Credits is currently used in more than 350 applications from 150 developers, representing more than 70 per cent of the transaction volume in virtual goods on Facebook.” Liu adds developers get to keep 70 per cent of the revenue from virtual goods transactions using Facebook Credits. They can also offer special incentives such as early access to product features, premium promotion on Facebook and premium targeting for ads to developers who integrate the system in their apps.

Many leading developers like Zynga, Playfish, Digital Chocolate, PopCap, and Arkadium have already adopted Facebook Credits for in-game virtual goods. Social games such as FarmVille, Mafia Wars, and Zynga Poker are already a big part of Facebook’s 700-million user base, of which almost 200 million play games on the social networking site each month.

Facebook’s most popular social gamemaker, Zynga (maker of Farmville), would now allow gamers to purchase virtual products using Facebook credits instead of the developer’s currency called Farm Cash. Electronic Art’s social games arm Playfish, which runs several popular games like Restaurant City, Pet Society and Hotel City has also abandoned its own virtual currency for Facebook Credits. Speaking to gamers on the Playfish blog, the company said, “Rest assured, you would not lose any of the Playfish Cash you have bought up to now.

We are making it quick and easy to convert it into the new currency of your favourite game to Facebook Credits by using the Playfish Cash Converter within each game.”

Developers have been testing Facebook’s new payment system for months. One such developer, Digital Chocolate, is one of the top five virtual goods gaming companies. Chief executive officer Jason Loia says, “People are less hesitant to buy virtual currency if it accompanies a consistent and trusted purchasing process so that there’s a lower barrier to entry and reduced friction in the payment process. Facebook’s involvement solves those problems for consumers.”

He adds when Digital Chocolate switched to Facebook Credits, the company was seeing a period of international growth. “So, we knew they were going to work on the problems we found ourselves dealing with, like finding monetisation partners internationally…Facebook does all the heavy lifting in terms of integrating and localising payments, so we don’t have to reinvent the wheel every time,” he says.