Facebook moves into micropayments for gifts

Social network enters micropayments game with its gift store. Is this a money-saving move, or a trick to get users to be OK with spending more of their cash?

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. 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]

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About the author

Josh Lowensohn joined CNET in 2006 and now covers Apple. Before that, Josh wrote about everything from new Web start-ups, to remote-controlled robots that watch your house. Prior to joining CNET, Josh covered breaking video game news, as well as reviewing game software. His current console favorite is the Xbox 360.

 

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