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Table of Contents

Lead Story

MPI restructuring, recovering

News

Industry Update

Discover stretches with strategic partners

Did Diebold patent the future of contactless?

WesPay studies the alternative payments heat

Virtual customers, virtual goods, real money

Prepaid Visa RushCard user wins jackpot

Features

AgenTalkSM:
Gerald 'Gerry' Surell

GS Advisory Board:
Unsettled economic times - boon or bust? Part II

Check 21's 'Top Ten'

Alan Walsh
ATMmarketplace.com

Views

Wise up to wireless

Paul Rasori
VeriFone

Education

Street SmartsSM:
Doing the price thing

Dee Karawadra
Impact PaySystem

Interchange for dummies

Steven Feldshuh
Tribul Merchant Services LLC

How to cure what ails health care

Aaron Bills
3Delta Systems Inc.

Mastering the interchange game

Ken Musante
Humboldt Merchant Services

Cash advance crossroads: High commissions or more sales?

Woochae Chung
American Microloan LLC

Company Profile

Sage Payment Solutions

New Products

Multiple functions, mini POS footprint

Blackstone Merchant Services Register System
Blackstone Merchant Services Inc.

Security in your keystrokes

BioPassword
BioPassword Inc.

Inspiration

Is an independent venture for you?

Miscellaneous

Statement of Ownership

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

October 08, 2007  •  Issue 07:10:01

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Virtual customers, virtual goods, real money

In July 2007, Singapore-based FirstMeta Pte. Ltd. launched what it claims is the world's first virtual credit card _ the MetaCard. The card is designed for "residents" of the popular virtual world "Second Life." "Second Life" is an online game designed by Linden Research Inc. in San Francisco. Players select an avatar (a 3-D digital alter ego) and interact with other avatars in this virtual world, socializing, building homes, making friends, and buying virtual goods and services.

"Second Life" has more than 9.6 million "residents" worldwide, spending an estimated U.S. $1.9 million every day in Linden dollars, which can be converted to real money. The current exchange rate for Linden dollars is U.S. $1 for every $265 Linden dollars. The MetaCard is a Linden dollar-denominated credit card. That kind of spending _ even if it is for pretend goods _ has gotten the attention of large companies like Toyota, Mercedes Benz, Nike, Coldwell Banker, Starwood Hotels and IBM, which have "set up shop" in "Second Life."

"Virtual worlds and virtual economies are a rapidly growing market," said Aileen Sim, who co-founded FirstMeta with Douglas Abrams. "The market as a whole is growing at about 55% per annum. 'Second Life's' GDP alone is estimated to grow about 900% from 2006 to 2007."

Merchants pay no installation fee, monthly fee or minimum charges. When they sign up they are given a computer script that allows them to accept MetaCard on their "Second Life" transactions. Merchant fees are 2.5% of each MetaCard transaction. Merchants who accept MetaCard are automatically approved for the MetaCard corporate credit card and MetaSavings corporate deposit account. MetaCard corporate monthly fees are Linden $300 a month. They are waived if the user spends more than $1,000 Linden a month.

Consumers can choose either the gold or the standard MetaCard. The standard daily percentage rate for the gold card is 0.13%, 0.15% for the standard card and 0.17% for cash advances. Monthly fees of Linden $300 are waived if the cardholder spends more than Linden $500 per billing cycle. "We currently have more than 200 cardholders after seven weeks of launch," Sim said. "We project several thousand cardholders by end of 2007, and tens of thousands by end 2008, or equivalent in revenue. These projections are including user base of other virtual worlds outside of 'Second Life.'"

The MetaCard appears to be the first time someone has applied real-life credit in virtual transactions. Experts are uncertain how real-life laws and regulations may have to stretch to cover virtual transactions. But if "Second Life" maintains its 55% annum growth, it's certain to be an issue in the future.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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North American Bancard | USAePay | Impact Paysystems | Electronic Merchant Systems | Board Studios