Facebook abandons its currency

The social network is phasing out "Credits", allowing people to use real money again

Facebook has announced in a post on its developer blog that it is phasing out its proprietary currency, Facebook Credits, and allowing developers to deal in normal people money again.

The introduction of Credits across the network was part of Facebook's aim to monetise its business beyond its core strength in advertising, as well as strengthening its position as a burgeoning platform for app development (incedentally, "app" overtook "application" in search traffic just before Christmas 2010). The intention was to allow developers to abstract their payments from the fiddly process of accepting difference currencies at changing exchange rates, while guaranteeing Facebook a cut.

In practice, though, the most numerous and popular paid apps on Facebook are games, and most of them implement transactions through their own currencies. This introduced a fiddly two-step process – change money into Facebook credits, then credits into in-game money – which slowed uptake of the games.

Facebook has now cut out the middleman in appearance, if not in practice. Developers will be able to accept payments directly, but must still use the company's own payment system, which will continue to take a 30 per cent cut.

Facebook's Prashant Fuloria writes:

By supporting pricing in local currency, we hope to simplify the purchase experience, give you more flexibility, and make it easier to reach a global audience of Facebook users who want a way to pay for your apps and games in their local currency. With local pricing, you will be able to set more granular and consistent prices for non-US users and price the same item differently on a market-by-market basis.

A step back for Facebook, but it is in everyone's interest that they get a strong payment system off the ground eventually. Even if their 30 per cent cut for developers is untenable for consumers, the internet remains in sore need of a viable competitor the dreaded PayPal.

Tetris on Facebook. Now taking dollars! Though not pounds for some reason.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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How Theresa May laid a trap for herself on the immigration target

When Home Secretary, she insisted on keeping foreign students in the figures – causing a headache for herself today.

When Home Secretary, Theresa May insisted that foreign students should continue to be counted in the overall immigration figures. Some cabinet colleagues, including then Business Secretary Vince Cable and Chancellor George Osborne wanted to reverse this. It was economically illiterate. Current ministers, like the Foreign Secretary Boris Johnson, Chancellor Philip Hammond and Home Secretary Amber Rudd, also want foreign students exempted from the total.

David Cameron’s government aimed to cut immigration figures – including overseas students in that aim meant trying to limit one of the UK’s crucial financial resources. They are worth £25bn to the UK economy, and their fees make up 14 per cent of total university income. And the impact is not just financial – welcoming foreign students is diplomatically and culturally key to Britain’s reputation and its relationship with the rest of the world too. Even more important now Brexit is on its way.

But they stayed in the figures – a situation that, along with counterproductive visa restrictions also introduced by May’s old department, put a lot of foreign students off studying here. For example, there has been a 44 per cent decrease in the number of Indian students coming to Britain to study in the last five years.

Now May’s stubbornness on the migration figures appears to have caught up with her. The Times has revealed that the Prime Minister is ready to “soften her longstanding opposition to taking foreign students out of immigration totals”. It reports that she will offer to change the way the numbers are calculated.

Why the u-turn? No 10 says the concession is to ensure the Higher and Research Bill, key university legislation, can pass due to a Lords amendment urging the government not to count students as “long-term migrants” for “public policy purposes”.

But it will also be a factor in May’s manifesto pledge (and continuation of Cameron’s promise) to cut immigration to the “tens of thousands”. Until today, ministers had been unclear about whether this would be in the manifesto.

Now her u-turn on student figures is being seized upon by opposition parties as “massaging” the migration figures to meet her target. An accusation for which May only has herself, and her steadfast politicising of immigration, to blame.

Anoosh Chakelian is senior writer at the New Statesman.

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