Time to Drop the Linden Dollar?

Saturday, February 14, 2009

Is the time of the Linden Dollar coming to an end?

There have been some developments recently which have me thinking about moving away from the Linden Dollar.

First, Amazon recently rolled out their Simple Pay system. This gives merchants an alternative to offer their customers. I could set up the Procyon Games website to allow Amazon payments. If you have an account with amazon.com, you could buy a Procyon game with your Amazon account, and never have to spend Linden dollars.

Second, Linden Lab acquired XStreet. There's two problems with this. First, Linden could use their monopoly power to force people to buy everything through the XStreet interface. It costs more to buy a game through XStreet; they charge an extra 5% commission. That means I either have to raise my prices (and accept lower sales), or accept less money.

The other problem with the XStreet acquisition is that it opens Linden Lab up to additional liability issues. PayPal has been notoriously draconian in their enforcement against the sale of pornographic items. There's plenty of objectionable items on XStreet, if you object to that sort of thing. XStreet kind of segregates things to their "uncensored" server, but the enforcement is lax and in any case, simply segregating the content might not be good enough for PayPal. If you sell items of a sexual nature, PayPal won't let you cash out your money.

So there's a not insignificant chance that anyone who sells items in Second Life might find their PayPal account blocked, because Second Life is XStreet and XStreet sells pornographic items.

If I enabled Amazon accounts through my website, I'd just have to add another big yellow button, next to the two you see now that say "Buy Procyon Games in Second Life" and "XStreet SL". You could buy any game right on my website, and it would be delivered to you in Second Life.

What would be the advantages of Amazon Payments?
  • It would be cheaper. Right now Linden Lab charges 3.5% to cash out Linden Dollars. Plus there's an additional 5% "tax" if someone purchases through XStreet. Amazon only charges 2.9% for items over $10 (currently about L$2600). Most of my games are at least that expensive. So I could lower my prices a bit. Or offer people a discount if they purchased through Amazon.
  • I wouldn't have to worry about PayPal freezing my account, because I wouldn't be dealing with PayPal at all. Amazon would be handling the whole transaction.
  • Customers wouldn't have to buy Linden Dollars to buy things. I wonder how many times I lose a sale when a customer wants to buy something, but finds they don't have enough Linden Dollars in their account. You never have to "add money" to your Amazon account; they simply bill you at the end of the month.
But then there are some disadvantages as well
  • A customer would have to have an Amazon account. It's not hard to sign up with Amazon. And they are the biggest retailer on the net, so I imagine many if not most people already have an account there. But it is a hurdle.
  • You have to have your web browser open. I know some people have computers that can't handle the stress of running Second Life and a web browser at the same time.
  • It's new. Nobody else is doing this that I know of. Some people would be scared off simply because it's different.
I'm putting up a poll asking how you feel about buying items through Amazon. Vote!



In SL and about Items I will need here I will keep it on Linden Dollars. If I shall open a Amazone.com account it should only be for En Garde. And I will have to pay exchange fie also. Wiht SL and Linden Dollar I can upload all the US I need for Premium, Land Tier and items at once and save on the exchange fie.
So I hope things stay as posible for Linden Dollars.

Bertram Merlin

Anonymous said...
February 16, 2009 at 2:18 AM  

I will never use Amazon Payments for Second Life items for the simple reason that I don't want my First Life avatar's identity revealed to those I buy things from in Second Life. It's a nonstarter.

February 23, 2009 at 1:34 AM  

That's an interesting point, Samantha, and one I hadn't considered.

But, I don't think Amazon reveals your identity to the merchant site. The way it works is, when you go to pay, you are handed off to amazon.com where you verify the purchase, and then amazon sends back a token to the merchant site that says "payment accepted."

It might be possible to cross-reference times of purchases and payments. I'll have to look further into this on the Amazon site.

Rifkin Habsburg said...
February 27, 2009 at 7:50 PM  

Hmm. Okay, that would make a difference. I was under the impression Amazon Payments functioned essentially the same way as PayPal, where there's no way to be anonymous (as far as I know, anyway).

February 28, 2009 at 3:58 PM  

I don't agree that the Linden Dollar is on the way out. On the contrary, LL bought those services to offer a web-based shopping experience. The biggest issue against Amazon Payments for a lot of SLers is an inability to be anonymous. We are now the Largest Independent U.S.-based provider of Linden Dollars officially authorized by Linden Lab. Our sim has become the must-see place in SL -- check it out at http://slurl.maxmoneysl.com

Anonymous said...
April 5, 2009 at 6:49 AM  

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