Market Watch Payments

No more Credits? An opportunity for Facebook.

I will not pretend that I had even one tenth of an insight into Facebook decision to finish its Credits program (announced here on their blog: Techcrunch as a review of what this could mean: .

In the context of their Karma acquisition, this actually solves one of the issue highlighted in my previous post.

The difficulty in this scenario is that the 30% rate is not compatible with ecommerce. Facebook would need to maintain several different rates depending on the activity done through its platform.

With Credits, Facebook may have limited itself to virtual goods as it had its rate of 30% seemed both as a platform tax as well as an “interchange” type rate for processing payments. It was therefore difficult for it to apply different rates on its currency.

Without Credits and with the new focus on local currencies, Facebook can still apply its 30% rate on the use of its platform for in-Facebook apps while having the opportunity to drive more E-Commerce on its platform for social events. Though the question remains, is is this experience significantly better than the one provided by outside websites leveraging Facebook Graph.

Leave a Reply