Kwedit says: Pay back my money or I'll break your virtual legs!

So theres another new social payments kid on the block with an interesting twist that we like. Kwedit is a virtual loan shark of sorts. Although these guys dont break your virtual legs (although that would be an excellent option for Mafia wars).

Basically they loan you the money to buy virtual goods – and when you pay it back or refer a friend you earn some kind of virtual credit score which is good for your game rep. If you dont end up paying them – no biggy – but you will earn a bad score and it will affect your in game status according to the game.

MichaelArrington from Techcrunch certainly seemed excited by the concept saying “Its unreliability is what makes it so attractive to social game publishers and other people selling virtual goods. It’s also a great way to let the unbanked masses out there pay for stuff without getting sucked in to scamville-type scams.”
Arrington is also excited as this is a step away from the kind of activity that leads to users being pulled into the now infamous “scamville” type deals which he campaigned about late last year.

Its a great post read the entire post here or read our highlights and screen shots form the techcrunch review below.

And if it turns out the kids with no credit cards aren’t actually good at paying you back – you could always break their virtual legs!

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The product is called Kwedit Promise.

Here’s how Kwedit works: they let users take on fake debt instead of paying for virtual goods with real money (or via scammy or legitimate offers). A user promises to pay later. It’s not an enforceable promise, and there is really no consequence if a user doesn’t pay. But there are built in incentives to pay it off, and Kwedit expects some percentage of people to actually do so.

As users take and pay off, or default, on Kwedit promises, a virtual Kwedit score moves up and down just like a real-life credit score.

Users get more credit (err, Kwedit) when they actually pay the stuff they agreed to. And if they don’t pay, the kwedit score goes down and getting more Kwedit becomes difficult. There’s some risk that users will try to sign up under another name to start fresh – but since most of the virtual games are on social networks and tied to established identities, that won’t work very well.

Kwedit also makes it very easy to pay off promised amounts. Most users won’t have credit cards, so they can’t pay via normal online methods. But users can print out (or save on their phone) a bar code and take it to any 7-11 store in the U.S. for payment. Or they can mail in cash via a pre-printed postage paid envelope (called the Kwedit mailer). And there’s a third way as well – users can ask others to pay the Kwedit for them via “pass the duck.” It’s a social payment feature that sends a message to a friend or family member asking them to pay.

What do I think of this? I think it’s brilliant. Social gaming companies like Zynga have said that they can only monetize a few percentage points of users via direct payments. They try to increase that number via offers, which is a slippery slope towards Scamville. Kwedit falls in between direct payments and offers. And even if users default, the Zyngas of the world aren’t out any cash. They’re just giving away virtual stuff in exchange for the Kwedit, after all.

If Kwedit’s early days are successful, look for all the gaming companies to jump on board quickly. And I also think this is a great idea for other virtual goods services – like online music. I’d love to pay for music on iTunes or MySpace music via Kwedit. At some point, we may just be able to. At launch Kwedit is available on 100 social games, and also as an option on Social Gold.

Is Kwedit unreliable? Yep. Is it Brilliant? Absolutely.

Originally posted 2010-02-05 09:44:16. Republished by Blog Post Promoter