Social Networks and Consumer Payments: Disruptions Ahead! Or The Games People Play

Research Explores New Developments in Social Networks,
Online Micropayments and P2P

Boston, MA — Worldwide, a significant group of innovators in the online and mobile payment solution communities are leveraging the concentration of consumers interacting within social networking sites, and taking aim, once again, at the market for “micropayments.”

Mercator Advisory Group’s new report Social Networks and Consumer Payments: Disruptions Ahead! Or The Games People Play examines the rate of growth expected in the markets for digital goods, and the approaches of new payment facilitators intent on capturing critical mass in the online and mobile domain, ultimately at the expense of the existing revenue streams of traditional payment providers.

Highlights of this report include:


Social networks are helping to drive a new market for game-embedded virtual goods and other micropurchases, estimated in excess of $15 billion globally in 2010.

Worldwide, innovative new entrants in both online and mobile micropayments are attempting to establish critical mass and sustainable business models, and are already extending them into micropayments in the physical world.


Innovators are further extending their reach, not only to additional markets for higher value digital content and mainstream e-commerce, but also into the global person-to-person (P2P) payment market.

Amidst a flurry of deal-making in the industry, one stands out; Facebook and PayPal have established a formidable partnership in an attempt to control the revenue stream attributable to the digital consumption of internet users worldwide.

In the smaller scale market of the Netherlands, the successful collaboration of the social network Hyves with Rabobank’s payment facilitator MiniTix illustrates the risk of disruption and revenue loss for traditional payment providers.

“The potential for growth in the Internet-enabled market for digital content is nearly limitless. Although online social gaming appears to be the initial point of entry for innovative payment providers (including the Facebook-PayPal alliance), digital publishing of text, music, software, video, etc. will greatly extend the digital content market. As this market grows, micropayment solution providers intend not only to grow with it, but also to transfer their success into the larger offline and e-commerce domains.” states Patricia McGinnis, Director in Mercator Advisory Group’s Banking Group.

One of 10 exhibits in this report:

This report is 33 pages long and has 10 exhibits.

Companies mentioned in this report include: Facebook, MySpace, Tencent Holdings, Cyworld, Alibaba, Zynga, Playfish, Playdom, PayPal, Boku/Paymo, Zong, Noca, Spare Change, HiMedia, and txtNation.

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