Facebook Axes Credits, Says It's Following Developers' Lead

Say goodbye to Facebook Credits: the world’s largest social network has done away with its own virtual currency, and converted its users’ funds back to local currencies.

Why ax Credits? Facebook says going back to local currencies should make things simpler for developers, and will help those who set prices for Facebook purchases build better pricing structures that are sensitive to global economic differences.

“Since we introduced Credits in 2009, most games on Facebook have implemented their own virtual currencies, reducing the need for a platform-wide virtual currency,” the network’s blog for developers reads. “As a result, we are updating our payments product to support pricing in local currency (ex: US dollar, British pound and Japanese yen) instead of Credits.”

Only the savviest Facebook users should notice a difference. “The transition will be seamless for your users,” the company says, with existing Credits balances automatically being converted into local currencies without any action on the part of the consumer.

But the change might add to the to-do list for developers. To that end, Facebook has set a deadline — Dec. 31, 2012 — at which point all apps must be reprogrammed to operate using local currencies.

The move is not without potential downside for Facebook. “The danger is that it could end up with a 'farmers market' - a less cohesive solution in which there are a multitude of payment solutions being offered on its network," an analyst told BBC in an interview.

Facebook will maintain its policy of taking a 30 percent from all purchases even after the currency switch is completed.

Some of Facebook’s major merchant partners have already issued statements on how the changes will impact their business. “Today’s announcement doesn’t change the economic relationship between the two companies,” said Facebook game developer Zynga in a release. “We’ll be working with Facebook over the coming months as they phase out Facebook credits and will be sharing more details on this when we report our Q2 earnings.”

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The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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