Facebook Kills the Credit, Begins Peddling in Local Currencies
Yesterday, Facebook announced they would be ending their Credits program. The Credits were used for purchasing gifts on the platform as well as transferrable inside Facebook's third-party applications. In its place, Facebook will launch purchases and subscriptions that can be made in any local currencies. Macau? Your Patacas await. India? Rupees for everyone. Mongolia? No Tugriks yet.
But why kill the Facebook Credit? It was rolled out in 2008 as a way to send digital gifts to your friends from within the platform (like poking but more meaningful, I guess). Credits was updated in 2010 and incorporated for use inside Facebook's third party apps.
But here's where things got complicated. Most third-party apps already had their own credit platform and payment system, so after purchasing your FB Credits (with a 30 percent fee), you still had to convert them to the monetary unit used inside the apps. Single payment systems are enough of a chore for most users, so adding another transaction just to use a placeholder currency meant most users avoided the system all together.
That's why Facebook is opening up the environment to localized currencies and subscriptions options – it allows all users to make purchases in their own currency and use that as a debit transaction. Realistically, there's not too much of a different apart from the terminology. Where once there were Credits, now you'll see that familiar currency sign used in your local environs. Users making purchases will exchange funds in their own currency, instead of making the awkward conversion from their currency to Facebook Credits – which equated 50 Facebook Credits to $5 – and then Credits to in-app currency.
The new transaction system “should be as easy and intuitive as possible for people who want to buy items in apps and games,” says a Facebook spokesperson, hence the move from branded credits to local currencies. So a user in London will be able to make purchases in British Pounds to buy credits in games – with prices appearing in local currencies – instead of converting first to Facebook’s credits, then on to the game or application’s credit system. It’ll offer up more flexibility to expand into different markets, which Facebook is keen to do as US growth is slowing.
Facebook plans to roll out local currency options over the next few months with all apps being converted by the end of the year. Facebook has already incorporated dozens of international currencies. But, unfortunately for virtual currency creators like Bitcoin or Plink, they won't be included in the options. At least there's no plan right now to have them involved, or considered among the international values – potentially because that would just open up users to the same obstacles as before.
Ultimately, using local currencies and subscriptions will ease users issues with making purchases on Facebook's platform without messy extraneous transactions, credits, and virtual coins valued at make-believe amounts. It also opens the social network up to another attempt at deeply personalized ecommerce possibilities, adding that much-desired valuation that all its investors are fretting over. Although we already know how Beacon went.
[Image courtesy Aidan Morgan]