Facebook Developers Not Happy About New Payment System

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Photo: AP

Facebook developers are not pleased with Facebook’s move to force them to use Facebook Credits for in-game purchases of virtual goods, and they’re not shy about expressing it.Facebook head of commerce product marketing Deborah Liu just finished a panel on stage at the Inside Social Apps conference in San Francisco. The moderator of the panel said he’d heard complaints from small developers that Facebook’s 30% cut will put them out of business, and asked her to respond.

Her first sentence — “Every day, every developer gets to choose between our platform and other platforms” — was met with laughter, jeers, and hisses from the audience.

The reason: with more than 500 million users, Facebook is the only social networking platform that really matters for social game developers. They may have a “choice,” but it’s the same kind of choice faced by developers of desktop applications back in the late 1990s — Windows or bust.

Liu recovered nicely, and explained that Facebook Credits is meant to reduce friction for in-game purchases — instead of forcing users to re-register or use separate payment systems for every game, it will let them buy once and use those credits across many games. In the long run, this should actually increase the total number of purchases that customers make in games, which will help developers and Facebook alike.

She also highlighted some improvements planned for Credits, such as a group buying feature that will let users “share” discounts with friends. For instance, a user who buys a virtual product in one game might be able to recommend that same product to a friend and give that friend a 40% discount.

And in case developers didn’t quite understand the details of yesterday’s announcement, Liu clarified: yes, they will be forbidden from using PayPal or any other payment platform to purchase virtual goods within Facebook apps. 

Developers can still use other payment platforms for versions of the games that aren’t on Facebook, but Facebook will be monitoring them to make sure they’re not undercutting Credits by offering big discounts on these other platforms and then letting users transfer those purchases to the Facebook game.

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