Fun & Games
The Future of Credit Cards – Earning virtual currency for spending in the real world & other world bridging

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Very soon, credit card companies and game makers will reward their customers who spend money in the real world using private label “rewards” credit cards. They will use gifts of virtual currency such as Blizzard’s World of Warcraft gold and Second Life’s Linden dollars.

A special “News from the Future” from MAKE:Virtual.

We’re a nation obsessed with credit cards. Seriously. Credit card companies and retailers all offer some form of loyalty program to commit to and encourage us to spend more of our hard earned dollars. Airlines pioneered these loyalty programs, convincing us to stick to a single carrier, and then rewarding with upgrades and travel. A company will do whatever it can to keep the churn down and spending high. Top brains at these organizations will obsess over how to keep you spending more and “join” their brand or bolt on to one you’re already in. Like Nascar? Visa has a credit card for you, complete with a reward points program that can earn you clothing and chance to ride in a pace car, or so I’m told, I don’t have the Nascar Visa card. But one group has been ignored, at least for now, the juiciest demographic of all, online gamers & “in world makers”…A quick tour of the different MMORPG’s reveals millions of players spending hours and hours each day, leveling their characters, as well as earning and spending some type of virtual currency (World of Warcraft currently has over 6 million players). While World of Warcraft doesn’t allow their players to build gold with real dollars, there is of course an “underground” market that buys and sells WoW gold. Linden Lab’s Second Life has a virtual currency, called Linden Dollars which unlike World of Warcraft “residents” can buy, sell and earn a living from Lindens – there’s a growing population of residents who make their living in the real world entirely from the revenue they procure in Second Life.

As the time of this writing, there are 166,922 residents, spending over 135,984.00 in 24 hours and $6.5 million USD in transactions took place is about 20 days. In 2006, there’s a good chance $100 million USD dollars worth of transactions will flow through the virtual world of Second Life. Linden recently rolled out their own exchange, Lindex, meaning – they’re almost a bank now.

It’s not a matter of if, just when – credit card companies, Pay Pal, Amazon, eBay and the individual “gaming” companies eventually bridge the real and virtual currencies with loyalty programs and private label credit cards – there’s too much money out there to -not- to do this. This “demographic” is the battleground. The more you spend, the more you earn, sorta. Virtual $ isn’t a crappy electronics doo-dad, it’s just a number in a computer. Maybe you’ll get some discounted airline tickets when you hit level 60 too, you deserve it! Earn your way to a new graphics card, why not.

With tens of thousands (and eventually millions) of “in world Makers” selling their virtual goods, routing the real money to and from a closely integrated bank / credit program seems to make sense. The virtual marketplace has happened, it just hasn’t been installed everywhere yet. Maybe this will help a new generation of credit card owners manage their credit, it’s hard to go $20k in debt in WoW, a lot easier in the real world…

Sure, there are complexities to any economy, real or virtual, and limits to how much currency would or could make an impact – but nimble MMO’s with economies will figure this out. There’s fraud and mischief that would develope, but that’s true always. Spend in the real world, earn virtual currencies for the “games” you play, that part is simple. This can apply to Sony, Xbox, etc…Xbox 360 already has “gamer cards”, ways to buy things too.

There’s another component to a loyalty program for online gaming – avatars. If you “play” any of these MMORPG’s a lot of emphasis on the appearance of your virtual identity, your avatar. In Second Life, it’s impossible to fly/walk without seeing virtual clothing makers and avatar stores. You can (and will) spend countless hours dressing up and personalizing your digital doppelganger – even in Warcraft, your avatar is something you spend months and soon, years developing.

Part of a future private label credit card will likely be card personalization. With low(er) cost one-off printing and credit card companies looking to make their offerings more valuable, getting a credit card with your avatar on it is worth a lot. This isn’t a new idea, personalized checks and license plates have been around for decades – in the last few years it’s been possible to get custom photos on US postage stamps. With Second Life it’s all user created content – I’m looking forward to going to the virtual bank for a photo shoot for my card.

There are a lot of neat integration and meaty engineering projects to get this going – the idea is simple, but in practice, we’re a ways off from plunking down a shiny orc killing branded card to pay for dinner to later use the earned gold for a new sword. There are a handful of companies that can bridge the worlds, I’ve been talking with The Electric Sheep company (I’m not affiliated with them, just like them a lot) and with their SLboutique (web / virtual and real world commerce) I think they’re a contender, they certainly have the technical chops – you see, this “virtual world reward points” idea is approaching now 5 years old, and with this article, I hope will get some conversations going, again. A little history, back in the day, I pitched to a big credit card company in 2001, after bringing a Macromedia Flash and Generator based online bank to market, but it was all just way way too early, the bank and this, there wasn’t an article-a-day about the billions of dollars in virtual currencies, there wasn’t a WoW, there wasn’t a Linden dollar – now there is – so who knows, let’s see what happens. If you’re interested in making this real, er, virtual, drop me a line, or just go do it, ktx.

Special thanks to Joi Ito and Eric Rice who have already signed up for their own credit cards :-]

– Phillip Torrone is associate editor of MAKE Magazine & Torrone Trumbo in world.

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