Will Facebook Credits be a hit?

In the US, kids can soon update Facebook credits at Coinstar machines thanks to Rixty.

Will Facebook Credits and Rixty pull it off to monopolize the monetization in social media?
Neil Vidyarthi interviewed Ted Sorom, Founder of Rixty.

Rixty is a great service where you drop change in a something resembling an arcade cabinet, and the money goes towards virtual currency and virtual goods for online games.

Staying true to their commitment to simplifying the virtual currency process, they’ve announced that thousands of ‘CoinStar’ machines around the country will now accept spare change and convert it to Facebook Credits.

Rixty is an interesting monetization company hovering around the social gaming space these days. The idea would be that young people, especially those who don’t have credit cards, can drop their change in these compatible machines, of which there are 20,000 around the country.

But will Facebook Credits be succesfull?

The pro's

It’s hardly even out of R&D (still available only to beta partners) but companies like Rixty are building it into Coinstar machines for kids to gain virtual credit with real pocket money.

It does have the monopoly, you can’t compete with it – it’s an easy extension of Facebook’s 500 million user near monopoly of the social graph. No other payment platform could build that many users so quickly.

It's better. The smooth payment system (a few clicks) contrasts sharply with the 'leave the shop, pay at the bank, return to the shop' payment experience we’ve come to expect. Some early adopters like Crowdstar have seen an ARPU jump of 50% despite the 30% transaction fee Facebook charge.

The cons

It's thin. Facebook being a social platform will always have the complexity with commercial ventures. The 'from the people for the people' basis of social media implies that extending the necessary features to make virtual credit useful on a large scale might be very challenging.

To learn from Facebook credits download this white paper