Depending on the virtual world, social network or MMO that you’re looking into the developers of that world will do their best to create an environment that includes the ability to compete, grow in social status or simply allow the user to express themselves through tools and attire that they can affix to either their social networking page or their avatar (or both).

Now that they have created the environment where that “character development” can happen the next step is to monetize it. There are several different strategies that they might choose to do so, from tailored solutions to the use of payment cards, Internet wallets, or payments through mobile telephone.

I came across this video from the 2008 Virtual Goods Summit that features the following panelists:

Lex Bayer – Founder & CEO, Spare Change Payments
Christian DeBaun – Director of Business Development, PayByCash
Gene Hoffman, Jr. – Chairman & CEO, Vindicia
David Marcus – CEO, Zong a part of Echovox, Inc.
Tim Pechmann – President, GMG Entertainment

The moderator is Paul Thind – GM North America, Sulake Corp.

Although there is no real representation on the panel, platform owners can also use third party sites to help facilitate item sales and RMT that would act as an intermediary on their behalf and therefore likely assume some of the fraud risk.

For the most part these payment platforms apply to MMOs and VWs as well as social networking sites.

This will give viewers a good overview of some of the different options for payment facilitation. Given that credit card charge-backs are such a huge issue, this is also an opportunity to hear how platform owners can transfer at least some of the payment risk to consumers.

Which one is the best solution? That will be business model and platform specific. My thought is that it will be driven largely by the marketing choices that the game platform makes (i.e. which geographic markets it chooses, which age demographics it targets, etc.)

These are interesting solutions from a fraud prevention perspective, but they also present interesting challenges and opportunities from an investigative perspective. How much does PayByCash know about where their cards are purchased for example? If virtual goods are being used as a payment mechanism how are you going to track that if the offender is using a payment card? The data may be more rich if a mobile telephone payment is used but who has the best records? The payment company or the mobile telephone company or both?

Some of these issues with respect to mobile telephone payments were discussed at the World Bank Workshop on Mobile Telephone Payments that I discussed in an earlier post.

I am interested to hear what the community’s thoughts are on these different platforms. Feel free to leave a comment or email me directly.