Even in an alternative universe that exists only in cyberspace, real money is vital to the economy. Digital payments company Skrill hopes to bridge the real and virtual worlds to benefit its digital wallet.
The London-based Skrill is working with San Francisco-based Linden Lab, the creator of the long-running virtual world Second Life, to provide payment services and simplify registration for newcomers. Skrill, which offers processing in more than 200 countries and more than 40 currencies, has worked with several hundred gaming companies and other retailers. The company is also looking to to extend its profile in the U.S.
"We're looking to become a player in e-commerce and this gaming model is a good way for us to do that," said Christopher Russell, CEO of Skrill.
Second Life was once a favorite playground for financial services companies that wanted to experiment with ways to stay connected to an increasingly tech-savvy customer base. Though game-like in nature, Second Life was built around socialization think of it as a 3-D version of Facebook or Twitter. Years ago, companies like ABN Amro and Wells Fargo even attempted to open virtual branches for Second Life users to visit.
Second Life has its own currency, the Linden Dollar, the can be exchanged with "real" currency, which is where Skrill enters the picture. Users enter their information once to Skrill, which enables repeated payments. Second Life was founded in 2003 and handled $3.2 billion in transactions within its virtual economy in its first 10 years.
"We've had experience with this model in Europe and it's worked quite well," Russell said.
Skrill offers more than 100 payment methods, including local options for international users, and Russell said offering a continuous user experience from within the game is the key to lengthening user sessions and encouraging deeper engagement with the virtual community.
"Once people leave the game, there is a good chance they may not come back," Russell said. "And the other benefit is if people have Linden Dollars and want to convert that into real money, they can convert in the digital wallet and upload into their bank accounts."
The relationship with Skrill allows Linden Lab to offer Second Life users many more options for their payment activity, such as buying Linden Dollars or paying account fees, said Peter Gray, senior director for global communications at Linden Lab, in an email.
"Second Life users are all over the world, and we are happy to be able to provide those outside the US with additional local currency options for their payments. We soft-launched the Skrill options for payments a few weeks prior to their press release announcing the relationship and we've seen positive results so far as those interested in alternative payment methods have successfully taken advantage of the new options," Gray said in the email.
Virtual worlds attract users from many different age groups and geographies, making their payment acceptance needs more complex, said Zil Bareisis, a senior analyst at Celent.
"Online gaming and entertainment providers often have unique demands, such as supporting international customers and their preferred payment methods, young customers who may not have access to traditional credit cards or bank accounts, recurring payments and currency conversion, including support for native or own currencies or many other features," Bareisis said. "Not surprisingly, they seek to work with companies that have experience supporting such specialized needs."