Facebook moves into micropayments for gifts

Since its launch in early February of last year, Facebook's online gift store has run off of standard U.S. dollars, letting users purchase gifts one at a time, or in bundles at a slight discount. However, starting Monday the popular social network has moved to a micropayment system where each point represents a cent, opening up its gifts marketplace to items outside of the $1 standard.

There are several benefits to using such a system, the least of which is user convenience. Microsoft, which has had its own points system since the advent of the Xbox Live Marketplace, has forced users to buy points in packs ahead of any purchases, in effect requiring user credit before a sale. The result of this is that users almost always have a leftover balance which can rest in Microsoft's accounts, earning the company interest until the user's next purchase.

The big difference between Microsoft's system and Facebook's implementation is that Facebook has stuck with the same monetary standard that most of its users are locked into. In comparison, Microsoft points are approximately 25 percent more per 100 than a dollar, which becomes confusing at higher amounts--and even more so at the international level. So much so that several developers have created currency translators and sites to help people figure out how to even out their remaining balances.

Facebook gifts must now be purchased in 'points' instead of U.S. dollars, opening up a new system where items can be above or below the magic 100 mark.

(Credit: CNET Networks)

So what does this mean for the future of gifts and other transactions on the service? We're likely to see both higher- and lower-priced items, which will result in customers having remainder balances. It's something that will entice (and require) them to buy more. So far Facebook is offering point packs in chunks of $1, $5, and $10 while the price points of gifts remain at the standard 100-point ($1) and free denominations. Facebook says free gifts will continue to be offered, however expect to see sub-100-point, and more expensive "premium" gifts coming in the very near future.

[via VentureBeat]

[Iamkar33m]

Who spends money to send someone a picture of something over the internet? Is this supposed to be a way for Facebook to profit off people with ADHD?

[JoyceBettencourt]

Beyond the Xbox Live Marketplace, we see the immense power of micro transaction in the virtual world of Second Life (http://secondlife.com).

Of course, the big difference in those transactions (http://secondlife.com/whatis/economy_stats.php) is they are not all happening between the operating company of Second Life (Linden Lab) and the end consumer/player, but also player-to-player transaction, which make up the bulk of all sales on their platform. Because of this, the exchange rate, like a real life economy, can fluctuate and has even seen real life phenomenons such as day trading in the online currency of Lindens.

It will be interesting to see how the roll out of a micro transaction model effects Facebook.

[veghs]

This is stupid. FB is going down the wrong road. I hate these apps which "throw" stuff at other users and other ridiculous and useless waste of bits which clutter FB.

[manualfunky]

even more proof that the majority of people are stupid idiots... buying gifts that have no physicality to give to friends on Facebook? WHere does all this money go? and how were the people paying for this ***** even allowed access to the internet in the first place?

Heres a picture of a penguin, it cost me a dollar, i hope you like it...

[therealgeeves]

Here's a picture of a naked penguin... hope you like it cost me $1.

[NYJester]

I prefer this application for Facebook-based shopping. It's a lot more fun and the selection is far superior.

http://www.sortprice.com/facebook_wishlist/

<a href=?http://www.sortprice.com/facebook_wishlist/.html?>www.sortprice.com/facebook_wishlist/</a>

[mayankdhingra]

The first time I heard of paid virtual gifts I too felt the same way(not that I completely feel different now) but then I think I might have felt the same way when I heard about second life.That said, I feel there's potential in this space after all and the more fb apps I use the more I optimistic I feel. If people can share virtual gifts for free I don't see any reason why at least some of them will mind paying of some special/different virtual gifts.

[bvdon]

Anyone thinking this is limited to pictures and other such things are missing the big picture. This could easily translate to any sort of transaction including services and products -- not just images.