When Facebook first introduced its Facebook Credits system in 2009, some pundits that believed it foretold one of Facebook’s future line of business. Those sorts of prognostications ended this week as Facebook announced it’d be phasing out the virtual currency, although it would continue to facilitate payments.
Ironically, it’s the enormous potential of Payments as a revenue source that is causing Facebook to phase out the Credits currency. Payments as a revenue source is too important to Facebook’s future to take the risk of promoting an untested and unproven currency. To establish Facebook Credits, Facebook would have had to spend significant resources educating the public and building the brand of Credits. It’s a much easier solution to simply transact in an already established currency that users understand and utilize.