Kwedit: Virual Credit for the Virtual World

If you’re into social gaming, there’s a new form of payment for the variety of virtual goods available in many online games: Kwedit.

The Concept

Here’s how it works. Gamers create a Kwedit account, complete with a Kwedit score. Just as in real life, the score enables them to take on debt. However, in this case it is virtual debt, established by purchasing “items” online such as enhanced abilities for their characters. Upon purchase, the user agrees to pay a certain amount of real money within a few days. Money can be paid through the mail, or users can print out a bar code that can be scanned and paid for at 7-Eleven convenience stores. If a user is unable to make a Kwedit payment, they can opt for the “pass the duck” option, where the user asks a friend or family member to make the payment on their behalf.

With more completed purchases, the user’s Kwedit score goes up. Conversely, if a user simply looks at this as a great opportunity for stealing virtual products and doesn’t make good on their Kwedit promise, that user’s Kwedit score goes down. In that case, the user will find it harder and harder (just as in real life) to take on debt in the online gaming world.

So, what’s in it for game designers looking for a payout? Kwedit does actually encourage gamers to keep up a high Kwedit score if they want to continue using the system. It is also a payment system for users (especially young users) who may not have a credit card or other online payment system available to them. And if those users end up not paying? Likely not a big deal, since the goods purchased were virtual anyway, so no money is actually lost in that instance.

The Kwitic

Kwedit was recently skewered on the Colbert Report. To defend themselves, the company removed its duck mascot Kwedie and the CEO posted a response on the site’s blog.

Will Kwedit become the new PayPal? Probably not. For one, it deals strictly with the virtual world, hence the ability to easily buy now but pay later (or skip payment altogether). Because of this, it doesn’t scale well to a real world application. But for younger computer users looking to experience what earning an actual credit rating is like, and the effects of poor credit management, it may indeed be a popular choice. However on March 3rd, 2010, Kwedit received $3.3 million in a second round of financing led by Maveron.

Currently, games powered by Social Gold accept Kwedit payments, including FooPets, Puzzle Pirates, Greenpatch, Tetris Friends, Island Paradise and hundreds more.

Eric Fleming