Facebook Credits: the new digital economy?

Simon Cowell’s announcement that the US version of The X Factor is to allow voting by Facebook Credits when the show launches in the autumn proves just how far the social network’s virtual currency could stretch.

To date Facebook Credits have been used to make virtual payments to send “gifts” to friends and on games such as Farmville and Mafia Wars, allowing users to unlock certain features at a price.

Although Facebook has categorically stated Credits will only ever be used for virtual goods, the lines between the virtual and real world are becoming increasingly blurred.

In November Credits moved into the retail space, as Tesco and Game began to sell £10 and £20 Facebook gift cards in its UK stores.

Facebook is also reportedly testing a “pay later” option for purchasing goods within its social games, sending users bills to repay Credit balances with a credit card or PayPal.

With every development Credits are becoming less play money and more a real-world currency.

Facebook Credits has the power to become the internet economy.

And most importantly: a real world currency where payment is arguably far simpler than any other service on the net and with over half a billion users that have no need to visit the internet version of the Bureau de Change in order to redeem it.

The idea of a simple universal payment to use on the web is something digital business have long sought after, as even services like PayPal require lengthy sign-up processes and a further log-in at the purchase stage.

And I would hazard a guess that, above any other business, publishers may already be investigating Credits as a micro-payment system in order to monetise their online content.

The debate over paywalls and paid-for versus free digital media is a tired one. The conclusion at the moment appears to be that nobody has found the perfect model.

Apple and Google recently launched subscription services that aim to make it easier for publishers (and music and video companies) to attract subscribers to their content, allowing for automatic app updates rather than users having to pro-actively search for new issues.

But publishers know that not every reader is willing to sign-up for the long haul. A micro-payment model would suit the promiscuous reader who is only prepared to pay a small price for the content they want to consume.

By publishers adding social sign-ins on their websites, these readers (and let’s face it, they are the mass-market) could pay for content in a couple of clicks without the long-term commitment. And publishers would still potentially have access to data about these fleeting readers, depending on how much Facebook was prepared (and allowed) to reveal.

Credits interacting with media is just one example of a potential cross-over, the currency could easily spread across the digital landscape to wherever a small payment is required.

Facebook Credits has the power to become the internet economy.