ZDNet has an interesting report from a Gartner Symposium last November, where it was discussed that virtual worlds are actually driving overall e-commerce growth - and blogged about by Payment Guy before (just re-emphasizing this point!). Gartner VP Andy Kyte led the discussion, and noted that the cost of processing cash in Asian countries like Singapore is ever on the rise, sometimes tacking up to five percent more onto the cost of goods simply to fund those processing and payment systems.
A solution in this case is electronic currency, and virtual economies have been following this model for some time. Singapore actually decided to create its own electronic currency, to be called Singapore Electronic Legal Tender (Selt), and according to Kyte, this will go live by the end of 2008. And like the microtransactions trend in online gaming that originated in Asia before finding broader success globally, the adoption of Selt could have big implications for the rest of the world, too. "Lots of countries in the world are looking very, very closely at what is happening in Singapore," said Kyte. The general success of concepts like Second Life's Linden Dollar are helping demonstrate that electronic currency is possible, thereby driving the push for electronic currency adoption, said Kyte -- though he notes that not all the kinks have been worked out, such as the security and taxation issues that surround online currencies. But once these are worked out, said Kyte, "it will only be a matter of convincing consumers of the technology." Kyte expects many further ideas to solidify out of the current climate of new ideas and experimentation in the virtual worlds space, and notes that banks might lose out unless they find a way to get in step with the trend.
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