Cashless Society: Vending Machines and Plastic

Cadbury Schweppes and MasterCard are testing 750 vending machines in the Dallas area, New York and Chicago to answer a key question: Will people spend more at vending machines if they can use plastic? The early answer is, yes.

Some of the machines were installed in January and have seen sales increases of 5 percent to 35 percent without any change in prices, said Mark Jackson, a vice president with Cadbury's U.S. beverages subsidiary.

Cadbury's experience fits with sales increases that other companies have reported when they shift from cash to plastic. Possible explanations vary from consumers not wanting to carry change to ATMs that dispense only $20 bills, which can't be used in most machines.

Cadbury is retrofitting machines in Dallas, New York and Chicago to take all major credit cards and debit cards. They still accept cash, too.

After three months, Cadbury will evaluate sales data and decide whether to retrofit more machines and introduce them in other cities.

''There is always going to be a degree of cash transactions,'' Jackson said. ``But we recognize the fact we're moving more and more to a cashless society. We wanted to offer consumers a convenient way to buy our products out of a vending machine without having change or getting change.''

According to Vending Times, an industry publication, vending was a $46 billion business in 2005, and it was virtually all cash. That makes it an appealing target for banks that issue credit cards.

Tests like Cadbury's are taking place now because the declining cost of wireless communications has helped make operating the machines economical.

''Vending is going to be the ultimate test for cashless'' transactions, said Nick Montano, executive editor of Vending Times. ``It's going to be five or 10 years before it really takes off.''

via Miami Herald

Postcards from Second Life: Legality of Virtual Sales

I was just noting the other day about the virtual gold in them thar hills in Second Life and the opportunities it may present for payment systems.

Shankar Gupta of Gaming Online/MediaPost, reports on various legal issues that plague virtual sales:

Online auction house eBay banned the sale of "virtual goods" such as currency or avatars used by players in massively multiplayer online games like "World of Warcraft," "Everquest," and "Neopets."

Exempted from eBay's ban is sale of virtual goods+services of Second Life property, meaning that islands, housing or fursuits can continue to be sold on this, and other, secondary markets.

eBay spokesman Hani Durzy said the move stemmed from growing legal concerns surrounding the sale of virtual property. "Because of those legal complexities, we felt the most prudent thing to do at this point was to ban them from sale for the site," he said.


The taxability of online assets also remains unresolved. In October, the congressional Joint Economic Committee launched a probe investigating how virtual property and income should be taxed. Nearly every game's terms of service state explicitly that all in-game property is actually the property of the game developer or publisher, and not the player in question.

EBay likely could have put off this decision until the legal complexities were resolved and not come out any the worse for wear, but it is very, very likely that the company has been under pressure from game developers to end the secondary market for virtual goods. Why? Developers hate this market, especially when it creates entire companies (like here and here) dedicated to making money by "farming" virtual worlds for in-game cash and rare items. It's such a huge business that workers in Korea who spend hours a day doing nothing but farming virtual goods have attempted to form a trade union, claiming that virtual farming is a $1-billion-per-year industry.

MMO developers, obviously, don't see a cut of this money, and on a more fundamental level, secondary trading of items and currency can destroy a finely balanced virtual economy by causing massive inflation. Professional farmers spend hours collecting money and rare items. They can then put the rare items up for sale in-game, for in-game currency. Then, all the currency they've received is sold outside the game for real cash. Players then use the cash they buy to buy in-game goods, putting that virtual currency back into the pockets of the pros, who can then resell the currency out-of-game again. Over and over again.

Second Life gets a pass because it's not really a game -- it's a virtual world. Second Life has no game rules to speak of, other than the limitations of the platform and the rules set up on individual islands, and no goals, other than the goals that users set for themselves. And the process of people buying and selling virtual items in- and out-of-game is part of the appeal of the virtual world.

EBay's move to ban the sale of virtual goods is a boon for game developers, who recognize that buying and selling virtual goods online is the equivalent of offering your friend $50 for the Park Place card in a game of Monopoly. The exemption of Second Life helps draw a distinction between virtual worlds and simple online gaming.

Keep tabs on the economic state in 2L here
or read SL Business for the latest goings on.



via Gaming Insider and Online Media Daily

Cashless Society: Mobile Payment Meets Social Networking

It has been a minute since I have posted a Cashless Society update...

Found this quiet and clever bit about OboPay, a US mobile payments company which has acquired BillMonk, a Website that helps people to keep track of the money they owe each other.

Seattle, Washington-based BillMonk's Website is aimed at social groups such as roommates who share bills, friends going on a trip together or dining out, or co-workers raising funds for a group present.

Obopay's acquisition of BillMonk means that BillMonk users can not only keep track of the money they owe each other, but also settle their bills using Obopay's text messaging service. They can use BillMonk to generate a running statement of exactly who owes what to whom. BillMonk users input their spending via text messages or directly onto the Website.



Oh, did I mention that BillMonk works seamlessly with/thru Facebook?


Obopay's payment service enables subscribers to send money to each other via mobile phone text messages. The recipient has to register at the Obopay Website to gain access to the money they have been sent.

An Obopay spokesperson says that BillMonk plans to support virtual currencies that are used in online worlds such as Second Life and World of Warcraft.

AKI RANT: I am beginning to feel vindicated about my crusade around here for getting in on the virtual cash economies (flashback and flashback).

Virtual gold is simply an untapped opportunity (stay tuned for updated $numbers i've dug up on this, soon). This is a no-brainer, services cost (from the fresh rims on my Grand Theft Auto to some "companionship" in the champagne rooms on 2L, to the designer sword for my ogre on World of Warcraft). Or if you don't like that, then you'll need increased branded sponsorship (Maybe free rims to all visitors at the Napa Parts Store on 2L? Free trial weoponry by Remington at the Cabela's on 2L? Free condoms from Durex on 2L?). Trust and security and exchange systems for money will be key in virtuality! OboPay+BillMonk are smellin' that pot o' e-gold over the rainbow.



But let's check into more about this OboPay...

Obopay has signed up the first U.S wireless operator to support its mobile payment service. Service is now live on all Amp'd Mobile handsets. Amp'd Mobile phones all contain embedded Obopay application software.

Mobile phone users who have registered with Obopay's Website can send money via SMS text message to another mobile phone user. The recipient has to register at the Obopay Website to gain access to the money they have been sent. As an alternative to text messaging, a mobile phone user can use their handset's Web browser to send money to a third-party.

Obopay offers a stored-value account which comes with an Obopay-branded prepaid MasterCard debit card. Users can spend money in their Obopay account by using the card at ATMs or merchants which accept MasterCard. The prepaid card, which is issued by First Premier Bank, is linked in real-time to the Obopay stored-value account.

Los Angeles, California-based Amp'd operates a broadband wireless network that offers 3G voice and mobile entertainment services in the U.S. Obopay users can check their account balance and transaction history on their Amp'd mobile phone.

Initially, the main uses of Obopay are likely to be sharing money with friends, but the company envisages the service being used to pay merchants. Ultimately, Obopay wants to take advantage of Near-Field Communications (NFC) technology, which enables mobile phones to make contactless payments, a spokesperson says. Obopay last week signed a deal with VivoTech, the Santa Clara, California-based contactless card reader vendor, to allow Obopay users to access the ViVOwallet software to pay for purchases by waving their NFC phone at a VivoTech POS reader.

AKI RANT #2: The first rounds are fired for disintermediating banks and, in someways the traditional payment systems like Visa+Mastercard+Amex+Discover from the mobile payment sphere. At what point might the phone company provide me with all I really need to buy, sell and trade?


OboPay
BillMonk

via ePay News