American Express has recently purchased a four-year-old company called Sometrics for $30 million. Sometrics assists video game creators develop virtual currencies and establish virtual commerce using those currencies within their games. It is anticipated that Amex will work towards building out platforms for virtual currency in different industries by utilizing the extensive merchant relationships they have cultivated throughout the years.
Ian Swanson is the founder and chief executive of Sometrics. He says his company works with some 450 video game firms which serve over 250 million players in 180 different countries all across the globe.
“It`s growing fast. It`s only picked up steam as more and more companies are getting into the virtual currency market,” Swanson said, according to American Banker.
Now that they are affiliated with the strong AMEX brand, Sometrics expects to expand its business even further.
A broad term, “virtual currency” encompasses things like rewards points and applies to everything from money used by players in online gaming to airline miles to Starbucks points to assorted other loyalty rewards programs. There is something called Bitcoin which can be used for real world purchases in addition to currency speculation – much the same as exchange-rate traders.
There is great potential for banks to get involved by presenting themselves as a storage option for consumers, where they could deposit Facebook credits, airline miles, Microsoft Credits and other kinds of virtual currency alongside their savings and checking accounts. This would enable banks to cultivate stronger relationships with their customers.
This could, in theory, lead to customers being able to use a mobile phone app as they wait in line to pay at retail outlets to help them decide how to best redeem their points.
Alistair Newton, a Gartner banking analyst, has predicted that in 18 months the banking industry “may start to see the tip of the iceberg emerging” regarding banks offering services involving virtual currencies, depending on the outcome of the economic and global banking crisis.
“There`s not going to be an overnight changing of the markets,” said Newton, According to American Banker.
One of the big issues regarding virtual currencies is how they will be regulated. Some of the first regulations expected are a set of anti-money-laundering rules put forth by the United States Treasury.
Visa purchased virtual-goods payment platform PlaySpan Inc. back in February for $190 million.