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The actual economy may still be struggling back to its feet, but the virtual economy is thriving like never before. It started with MMOs, but has now moved to Facebook games: the ability to buy with real money things that exist only in a database somewhere. Much has been made of this trend in the media, though most coverage seems to miss the fact that buying virtual goods is really not that different from buying software, which people have been doing for decades.
This trend had by necessity left people who, whether by choice or not, didn’t have a credit or debit card with which to pay online. Some places will take PayPal, of course, but that requires you to have a bank account and be an adult, which lets out a whole lot of people, especially on Facebook. But these people need worry no longer, for a service that sounds like it was founded by Elmer Fudd is coming to their (virtual) rescue.
A start-up called Kwedit promises to fill this niche, by providing credit to buy virtual goods to people who promise to pay later. They’ve partnered with Social Gold, which handles transactions for many popular Facebook games like Mafia Wars and Barn Buddy, and with 7-Eleven stores to handle in-person payments of the debts incurred. It’s such a simple idea it’s a wonder it hasn’t been done before. People who sign up for Kwedit get a score based on how reliably they’ve repaid their credit, and if they don’t pay up, the games that thereby don’t get paid haven’t lost anything real.
This has obvious pluses for parents whose kids want to play games that involve virtual goods but don’t have a credit card of their own: not only can you avoid using your credit card to pay for the stuff, but you can teach them about how credit works without anything bad happening. If they pay back their Kwedit promises, their score will stay high; and if they don’t, they won’t be able to use it any more, but nothing will happen to their “real” FICO credit score. Kids can pay at a 7-Eleven store or by mail, using a prepaid mailer you can print from the web.
Kids can also “Pass the Duck,” which allows them to request that someone else accept the burden of payment on their behalf. That person has the right to refuse, though, so don’t worry about that.
My kids aren’t yet playing any games that will accept Kwedit payments, but FooPets and Puzzle Pirates are two of their business partners, so that may change soon. It seems to me like a novel way to introduce kids to the concept of credit without any of the real-world risk.