Facebook Testing “Facebook Credits for Websites” That Helps Third-Party Sites Sell Virtual Goods
Facebook has just announced a closed, limited test in which for the first time it will allow websites to process payments for virtual goods using Facebook Credits.
Context & Ripple Effects
Facebook Credits has so far lived inside Facebook's own canvas: a single currency for games and apps, with the company's January 2011 developer-blog post on the next step for Credits signaling that the currency was meant to travel further. This closed, limited test is that step — for the first time, websites outside Facebook can process virtual-goods payments in Credits.
First-order effects
- Third-party website operators gain a ready-made checkout for virtual goods, plugging into Facebook's stored-value currency and logged-in user base instead of building their own payment flow.
- Facebook becomes a payment processor for off-platform transactions, extending the fee stream it already earns on in-app Credits purchases to sites it does not control.
Second-order effects
- Standalone virtual-goods payment providers and wallet services competing for game publishers' checkout volume now face a rival whose currency is pre-funded by hundreds of millions of users.
- Other platforms operating their own app currencies come under pressure to open them to third-party sites as well, or risk publishers standardizing on Credits as the cross-site default.
Third-order effects
- If the test generalizes, social-network identities and their attached wallets become shared web infrastructure — platform currencies evolving from walled-garden tokens into a de facto payments layer that regulators and card networks would eventually have to reckon with.
The trend: Platform-owned currencies are expanding outward from their host networks toward becoming web-wide payment rails, following the same off-platform extension path Facebook took when it began testing ads for third-party applications in 2009.