Social networking giant Facebook is ready to launch its payment system, Facebook Credits, in India from July 1, 2011. The virtual currency payment system is currently being used for transaction across games on the website in some countries and can be purchased using credit cards, PayPal and mobile phones.
As noted on the company’s official blog by Deborah Liu, Platform Marketing Manager for the company, “Facebook Credits is a virtual currency that enables fast and easy transactions across games on Facebook. With Facebook Credits, people enter their payment information once and can buy, earn and spend safely across lots of different games.”
The blog reveals that currently Facebook Credits are being used in more than 350 applications by about 150 developers. It represents more than 70 per cent of virtual goods transactions volume on the website.
Will Facebook Credits impact e-commerce by providing a safe and easy platform for e-transactions? Trivikram Thakore, CMO of websites such as Deals and You, Fashion and You, and Bestylish, believes it could be useful for e-commerce websites to leverage their fans on the social network.
He said, “The popularity of Facebook makes it a dream medium for brands to engage with their consumers. Our group of companies Deals and You, Fashion and You & Bestylish leverage social networks very actively and obviously, Facebook becomes an important factor in our social media marketing strategy.”
“We are always open to innovations that come through these channels and find ourselves interested in virtual currency in the form of Facebook credits. We hope to ride this addition on Facebook and find interesting ways of using it to create engaging interactions with our audiences,” he added.
Allowing users to have a safe and easy way of transactions, these Credits can be useful for brands in their interaction with their fans. “We’re excited to give Facebook users the confidence that when they purchase Facebook Credits or receive them as a gift, they can spend them in any game on Facebook,” Liu said.
Selling products to fans on Facebook can be one way brands can increase interactivity with consumers.
Ajaay Gupta, CMD, Capital Foods Ltd Brand (owners of Ching’s Secret and Smith & Jones), believes it will be a good generator for revenue for online sales. He said, “Ching’s Secret can sell its products using Facebook Credits – so that Ching’s Facebook page becomes a revenue generator. Also, we intend to offer ‘Facebook only’ special edition trials and ‘first to buy’ promotions that can make our community more compelling for consumers.”
“Ching’s Secret also intends to develop a loyalty or incentive points leveraging Facebook Credits and can offer online and offline to encourage interaction with the brand through the social network by awarding points that can only be redeemed on Facebook, even if they’re picked up in store. Lastly, Ching’s intends to launch a Facebook Gaming network around its brand in the casual and sports game genre and Facebook Credits can be very useful for the same,” Gupta added.
Agencies, on the other hand, do not give the payment system much value. Yashraj Vakil, COO, Red Digital, said, “Facebook Coins have seen their primary use in games so far, maybe because Facebook made it mandatory for them to be used. However, I am not sure how it will pan out for retailers and social commerce in India and worldwide. Retail doesn’t have very huge margins to pay with, and giving away any of that in lieu of allowing users to pay with Facebook Coins may not be the most exciting thing for them to do and will hurt margins.”
However, he added, “For bigger brands it might be another way for them to get users exposed to their brand and engage them by offering Facebook Coins, if the users and brands see true value in it.”
He went on to say that the lack of competition would allow Facebook to guide the usage of Facebook Coins in the direction they want to and maybe even increase their share with developers from 30 per cent. “We obviously don’t want Facebook to make the mistake that eBay did in the US. As the company grew, investors wanted to see more money flowing in and they simply kept increasing the fees charged to sellers, who were the crux of their business just like buyers,” he noted.
Chris George, CEO and Founder, EBS Worldwide, believes that privacy issues on the website would hinder users to use it as frequently. He said, “Facebook is a good social interaction medium. But I do not think it would necessarily be seen as a good transaction medium. People in India would prefer independent payment tools, as Facebook is facing questions of privacy of its users. So I do not feel Facebook Credits is going to leverage brands and their presence on the social network.”