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What happened to the theory that Facebook Credits would become a universal virtual currency, competing against the likes of PayPal and others? Facebook very quietly closed the program down a few weeks ago, reverting to a more standard model that enabled spending and credits to be made with local currencies around the world (similar to an iTunes account).

Credits was originally conceived in 2009 as a virtual currency, and specifically supported gamers needing to buy and exchange game elements (fake palm trees, etc.). They were used by 15 million social gamers in 2011, but had begun to be used for other applications, including travel and especially, Facebook Offers. The shut down of Facebook Offers after just a few months, however, seemed to limit Facebook’s ambitions to develop its own currency.

Could Credits have been successful as originally conceived? Facebook didn’t do very much to educate users how to earn and spend Credits; most users never had an idea what Credits were for or even how to check their Credits balance (hidden several clicks into a users’ profile).

In addition, Facebook charged developers a 30 percent commission to accept Credits, discouraging many hard goods companies with lower margins from joining the ecosystem and selling their products. Many companies that had high incremental costs (i.e. hard goods companies and restaurants) would be reluctant to pay such a high fee.

One company that had counted on using Credits but will adjust to the new system is Plink, which set up a Loyalty/Rewards program using Facebook Credits as its sole reward currency. Plink enables members to earn rewards by patronizing nine top dining and takeout establishments at 35,000 locations, including Taco Bell, Outback, 7-11, Burger King, Arby’s and Dunkin’ Donuts.

Even before Facebook phased out Credits, the company saw that FB Credits wasn’t universally applicable beyond the 70 million strong gamer universe. Hence, the creation of a partnership with TangoCard, allowing rewards to be spent at retailers such as Amazon and iTunes.

Plink CEO Peter Vogel says the dual track with Facebook and TangoCard still works well for the company. While Facebook remains important to the company, “Members were asking for more options and we are trying to spread out our ability to acquire members,” he told us.

Vogel still believes, though, that commerce is about to heat up on Facebook. “Facebook made this move in order to make it easier for members to buy and sell, eliminating the confusion presented by a made-up commerce,” he notes. In a note on its developer page, Facebook said it was eliminating Credit “to simplify the purchase experience for users, give you more flexibility, and make it easier for you to reach a global audience of Facebook users.” The note added that the successor product will support pricing in local currency ( ex. US Dollar, British pound and Japanese Yen.)

Vogel also asserts that Facebook is showing other signs that it is serious about commerce. Facebook has finally opened an App Store and may soon be selling Paid Apps, he suggests. Facebook has also hinted that it will consider lowering that 30 percent commission for certain industries. And at the same time Facebook cancelled Credits, it added subscription billing to its payments platform. This will enable consumers to be billed monthly for subscriptions (most likely from digital entertainment providers like Netflix, Spotify, The Washington Post and others).

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