Virtual money a real commodity
Virtual money used on social media and games sites may one day find wider currency, a senior figure in the Australian payment industry has suggested.
Australian Payments Clearing Association's chief executive, Chris Hamilton, said forms of virtual money, such as World of Warcraft gold and Second Life Linden dollars, are already traded between gamers in US dollars on specialist websites.
What this means, in effect, is that the virtual money has a US dollar exchange rate that would allow it to move outside the game.
"It is on its way," said Hamilton, who was speaking at the Retail Financial Services Forum, held in Sydney yesterday.
"The social media world is very challenging and confusing. There are more and more virtual currencies being created and it is a completely unregulated market."
Hamilton's comments about virtual money were at the pointy end of a paper on changes in the payment system, the main point of which was that payment networks are being transformed from utilities into competing networks.
He cited the growing competition between debit and credit, scheme debit versus Eftpos, ATMs losing their share of cash transactions to cash-out at the point of sale, and Bpay taking over from cheques as the primary tool for bill payment.
He said the industry would have to brace itself for more regulation. While central banks and regulators welcome the innovations and efficiencies that come with competition, they will move to set standards that guarantee access for new entrants.
"You can't have a fragmented network. There have to be some parts that remain utilities."
The emergence of mobile payments adds another dimension to this competitive dynamic. "Mobile is straightforward - you can put in place a virtual form of any type of payment you already have.
"What is interesting is that you have all the apps on the screen. Everything is on one device. We don't have anything like that now.
"When we look at all this at APCA we use the word marketisation. The payments system is marketising."