I admit it, I know nothing about Facebook Credits. This just shows how online gaming-challenged I am. Facebook Credits are the “official currency of Facebook”, used in more than 200 online Facebook applications such as Farmville, YoVille and Cafe World, none of which I know anything about.
The more interesting thing about this (at least to me) is that Facebook has a plan, and that plan is to make Facebook Credits a kind of global currency. This week they announced that Facebook Credits will be available at Walmart and BestBuy stores in Canada.
I use PayPal a lot and I love the way you can do a virtually instant transfer from one account to another. No waiting around for four or five days, or even five mintues for the transaction to take place. But just like normal banking procedures, the PayPal process bogs down when you want to transfer money into an account. Transferring from a bank account often takes as long as a week. And access to networked (Visa, Mastercard) debit cards is severly limited in many countries.
The same thing applies when you want to transfer money from Canada to a US bank account or vice versa. If you don’t want to use a credit card (which I usually do not want to do), you have to revert to the 1970s – send a cheque, money order or do a bank transfer. I recently received a cheque from a US client and had to wait three weeks for it to clear! Now that’s efficiency.
This is slowly changing as banks and card companies figure out how to make money with debit cards (as opposed to credit cards). But imagine how cool it would be if there were a no fuss, no muss currency you could use to transfer money anywhere in the world.
This kind of system will clearly not come from the fragmented banking system. It will have to come from a third party like PayPal or Facebook. And there’s nobody with the current worldwide penetration of Facebook.
Yes they will have to tighten up their security, and yes there will be growing pains with people getting ripped off here and there. But the same thing applies to the banks and to the credit card system. Have you ever given your credit card information to a merchant over the phone? We used to do that kind of transaction (at a former business) everyday. There were credit card numbers floating around as if it was no big deal.
It will be very interesting following this – a truly game-changing development. This could take Facebook well beyond anything that has come before and cement their future prospects for a good long time.