Banking and In-world currency exchange

I am highly opposed to the original idea and would be very sad and dissapointed if it were ever implemented.

I liked the original idea that LL would never do something like this from previous old Town Halls.

Liability and the fact that prices on everything would rise are factors in why I'm against this.

I think the best solution would be to do as Kex suggested, allow the *user* to implement something like that if they want.

GOM and IGE get plenty of exposure from things like the MOTD as Jack mentioned and also from other users. I've heard from numerous people who are in Live Help that they often tell people about GOM or IGE when questions pertaining to it are asked. And also have seen GOM and IGE mentioned various times at places like the Welcome Area.

The processes people have to go through (setting up multiple accounts etc.) are *good* in my opinion as they make the ease of making L$ into a bloated economy much harder, its a filter so that not *everyone* can easily spend US$ on everything.

Also, minors often slip through the cracks, and other adults may even blow all their money on things without even thinking. Both problems can raise ill-will between the costumer and LL. I know of many people who are pissed because they blew *alot* of money on There, for the pure factor that it was too easy to do.

While this may be good for a company and making money, its bad for publicity, because then you earn the rep of being a greedy company.

A bunch o' comments on this:

1) Any system that we implement would be based on open standards and would allow folks other than GOM/IGE to participate.
2) Part of the reason for creating the system would also be to enable better fraud sharing between SL, SL currency traders, PayPal, etc, which reduces the risk for everyone.
3) By having a mechanism for currency traders to directly integrate into the client, it becomes much easier to build trust mechanisms, including FDIC-like limits on losses, SquareTrade-style seal programs, &c.
4) I know most of you get it, but to clarify, this is just a way to make it easier for SL residents to move currency between each other (on the GOM model) or to act as banks (the IGE model). SL will not be directly selling or buying currency using this system.
5) Much of the technology required to do this is related to ongoing work on better UI flexibility and more connections between SL and the web/outside world.
6) Much of the technology required to do this could enable other trading and communications options between residents.
7) Finally, this is another example of Linden's new "post early about new features"-policy that allows us to spend more time debating and improving ideas in order to make SL a better experience for everyone, so thank you very much for taking the time and effort to really chew on this one!

Sounds good to me.

One comment Cory, please be sure whatever is integrated into the Client Software will also allow for currency exchange models other than GOM and IEG. There is still lots of potential for new financial-models different than the these two.

This is good, just a thought, before the deduction is made from the players bank account there should be a confirm box with what is expected, that would act as a binding agreement with both parties (i pay you 10$ you give me 2000$L). The back-end of this would have to be on a LL server so neither party could manipulate the records to benefit.

I guess if LL is ok with being a CC i'm ok with it.

I like this idea.

Great convenience mechanism. I think many people will use it because of that fact.
GOM and IGE will still offer their current trading methods.

fen-

Banks buy and sell currency when they are moving currency between their customers. They pay you 2% per annum for the privilege.

Ask your mom - "can you buy and sell currency at the bank?"

She'll look at you like it's a trick question.


The point you are completely missing here is that by offering an interface direct to the users you are basically going to cut margins down to zero. GOM/IGE will not make any money.

Sure, I guess you could create artifical margins but that just means more people will set up an interface and jump in - why not? It's free money! So the slice of the pie will be ZIP.

It's almost like you are willfuly trying not to say your selling currency for some hidden agenda. Why? legal reasons? Do you think if you keep insisting you aren't selling currency than the lawyers will all agree "oh they aren't selling currency"?


But, regardless, it's a good idea. The current system is way too awkward.

It's a trust thing, coupled with blindness.

I trust LL will do what they say and NOT directly be involved in L$ currency conversion

I'm blind 'cause i can not see how LL will do that until the client software is updated.

I'm like a group of blind people feeling the elephant and saying out-loud what the elephant looks like.

Some things have to be trusted on the blind-faith of the written forum-messages.

Right?

The only thing I trust is that they will try to do what's best for SecondLife .. I suspect that won't necessarily be what's best for IGE/GOM.

Question, so this system would work like the following?

User A signs up and says they are selling L$ for whatever the current price is.

User B then clicks the interface option and looks for the best price for L$ they currently want.

User B finds User A's offer, and purchases the L$ directly from User A.

User A's ballance imediatly shows the changes.

User B's credit card is charged, the money is transfered to User A's credit card.

User B's ballance imediatly shows the changes and they now have the L$ they purchased.

Is that a correct or close to correct way the processes would work? If not, how WOULD it work?

I do not have a problem if the GUI just simply allows users to trade/buy/sell L$ amongst themselves.

I do however dislike the idea of LL acting as a bank.

Edit: fixed spelling mistake.

Bump, any possibility of getting a confirmation on how exactly the proposed system would work and if the above is anything like whats being considered?

PLEASE Please Please............. Always wondered y it wasnt available anyway. Please and hurry LOL

Isn't the discussion here open for that same reason?

why does LL insist on fixing things that ARENT a problem and neglecting the real issues?

this is a freaking game! lets keep it that way, i do NOT want to obtain any license nor go threw any approvals to play. the current system is sufficient in my opinion. if not a player can simply open another third party site and we can go from there. but i think LL should devote their efforts to the lack of GROUP SUPPORT and maby the million and 2 bugs they still need to find/fix, the graphical issues, and the list goes on and on,.. how about you just scrap the idea of more profitability for now, and work on keeping the current residents happy and not crashing, i for one would LOVE to see you spend some time reforming the groups since most all buisness that goes on threw SL is done threw groups. a group cant own land and set it for another groups use, nor does group $$ show in net worth, also members get a cut of the profit should be an option, because of this i have to have seperate groups which cant easily interact so as to not pay all my members my hard earned $$. but i guess this topic is for another post but basically keep it simple and dont make this game a buisness risk and expense the govement might take legal action on the GAMER for.

its a game some people forget that

sorry for the hostile tone, i am just a little irritated 10 9 8 7 6 5 4 3 2 1 0 ok i'm better

Wow this is one i just can't miss up - there are so many fun things to respond to and so many good points. The problem is the points fall on both sides of the issue. It would be an extremely short-term solution to a long-term problem; the linden is nearly worthless due to linden labs mismanagement and with ideas like these will probably deflate against the dollar regardless of increases in game content by those still willing to participate. Is an infusion of new capital from a nebulous group of users unaware of exchanges really going to fix this (with increased visibility)? I doubt it.



Looking at this debate i wonder: Whose problem is this? Is this even in the realm of problems most users experience with sl? Each person in the metaverse has gone through the credit card process once (and in more detail) on the linden site itself in order to sign on to the game, so we know they are more than capable of doing so if they desire. Is it be possible that the performance and design of the systems the third parties currently use is already being influenced by the market they serve, and that if changes were needed they would have already taken place? IGE not only accepts payments immidiately, but they also -pay- immidiately, rather than on a scheduled basis as GOM. They both serve different purposes in the market and seem to be more than capable of handling the situation in a stable market. Maybe therein lies the problem. I am curious to know if the majority of basic users and or 1st/2nd level tier members are truely comfortable buying virtual goods with real money when they have witnessed massive fluctuations of both 'ingame' values like land sales by over 100% as well as devaluation of the currency based on random decisions made by a small group of elite.



It seems a paradox to me that someone must both feel that all their inworld goods and land are inherently valueless while at the same time be willing to pay real money for L$ rather than simply play the game and function from within (living off your stipend+earning money). Also, i was under the impression that just recently fraud was attempted against GOM, and according to the email i was sent was completely fixed within a day or so. Is it fraud sharing or profit sharing that you are after? Wouldn't it better fraud protection for the consumer (us) if LL were to withdraw the extremely harsh (new and more restrictive) EULA that repeatedly denies the worth of anything SL related and questionably prohibits any form of recourse?

If the technology required to do this can enable other trading and communications options, I am all for that. The communications and trading in SL are extremely poor. As Kira mentioned, the group code is especially deficient and in my opinion one of the most glaring reasons that so much land is under built around the grid. People are encouraged to seperate individually and discouraged from working together, with incredibly simplistic grouping that restricts businesses and development far worse than individual control allows no matter what you do. I submit that if a boost in the L$ value is needed, increasing the productivity of the people making and spending it is the right way to go rather than switching from something unbroken to an obviously flawed system that brings more unknowns into the equation than before.

Very well said Deklax. I concur.

I'm going to play devil's advocate here, since it looks like I may be the only one here so far that falls into the catergory of people that the Lindens want to address with the Banking/In-World currency exchange (at least I haven't noticed any other posts stating otherwise.)

I am one of these "new" users, for the most part. I've been a resident of SL for a few months now but I am still very much a casual player. I log into SL when I've got downtime. My game sessions are usually less than an hour. I don't run a SL buisness or have any other SL responsibilities so basically, I log on to buy cool stuff and chat, when I've got the time. That's it.

My weekly stipend doesn't go very far. So when I walk into Celestial Studios and see Starley Thereian's awesome skintones, and realize that I'm going to have to save my L$ for weeks and weeks to buy one, then I've got a problem. Hey, you gotta' pay for quality, I realize that. I respect that. My issue is with my own lack of L$'s. I also tend to be insanely jealous of other people's artistic skills but that's another matter for another thread. Anyway, I'm forced to save every penny for weeks until I have enough. Or, I can sell my virtual body. Yeah, not happenin'.

Now, I can register an account with one of those 3rd party brokers everyone is talking about, drag my butt over to the Paypal site and get with the money buying. But you know what? It's not worth it to me. I don't want the hassle. And call me ignorant but it doesn't feel safe dealing with 3rd party folks (no offense to the IGE or GOM guys....I'm just skittish like that.) BUT, if there is some sort of setup within SL that INSTANTLY charges the account I have my monthly fee billed to, well then everything's gonna' be okay. I can buy Starley's skins or maybe Marcos' ARMORD suits and not bat an eyelash.

Anyways, that's how I play SL. I don't make clothes, I don't build boats. I buy other people's stuff with my money. And if the Lindens want to make the way I play easier, then cool beans. And I'm sure there are plenty of other casual SL'ers that feel the same way.

Thanks guys for at least thinking of us.

As I understand it Athan, that's not what is being proposed.

All that has been suggested is that LL will incorporate the info re: 3rd party currency businesses in the UI/Client, and possibly require existing and new currency businesses to register with LL.

Seems most everyone is opposed to LL directly providing the conversion of L$ to US$ and US$ to L$.

This is what Robin Linden said in the intial post on the thread:

"- We bill your credit card and make the payment to a third party exchange site (e.g. GOM, IGE). This means that you don't need an account with IGE or GOM to buy currency. Purchases would be limited by max US$ per day, per month, and/or time as a user, etc. to prevent fraud. "

I go through a LL interface-->LL pays me L$'s-->LL bills me $$$-->and LL pays the 3rd parties $$$.

Sounds like that's what's being proposed to me.

Unless I'm totally confused. Which, by the way, happens more often than I'd like.

What we have here is a lack of understanding of how ecommerce works.

The ability to instantly 'convert' (go from vague interest to typing in credit card numbers / paypal paswords and clicking submit) is probably the number one most important thing in doing business on the net for low cost goods.

High cost goods, 50$ aren't usually done on instant conversions.

There are a number of factors which improve conversion rates for low goods, but probably at the very least 70% of the battle is purely functional.

What this means is that you find a dress or a spaceship or land or whatever you want to purchase. It's going to cost you somewher from 1$ to $5. Whether or not this item is of high quality or from a brand you trust is not really your biggest concern, unless 1$-5$ is a lot of money for you.

What your biggest concern is - how hard is it going for me to make the purchase? Do I have to blip through 15 differents web pages just to buy this one item? Or can I just type "buy 5000 lindens @ market" and then make the purchase.


Why would more transactions be good for SL? More transactions will mean more people selling items which will mean more funding for new and innovative ideas. It will create a much more richer, fuller and complex market which leads to a faster evolution and speeds up the pace of SL getting where it needs to go - a much richer, fuller, and complex world.

I actually like the time involved when Im spending 200USD or more for some land. It gives me time to think over the purchase more. Now, if I am buying something for 20000$L I simply wont buy it if I dont have it. So, I would never use a quicky service. It's just something I feel isnt needed. I would much rather see things fixed that are broken than to add more things.

Yep, this is exactly my issue. I'm willing to spend more real-world currency if there is an in-game inteface managed by LL to handle the transaction with the 3rd parties and billed to my account on file. I don't want to jump through hoops and go outside of Second Life to do something inside of Second Life. It's not worth it to me otherwise, simple as that. I'd rather just save my money.

I have avoided this thread for a while as I attempted to form a coherent opinion - something of a stretch for me at times.

Here are the few things I came up with.
1. This is - at its core - a proposal involving two simultaneous issues - trust and convenience.
1a1. Trust - that issue between LL and each resident is one that is broached each time a user signs on and each time a credit card is charged for land tier, auction win, whatever. It seems to me, therefore, that residents do implicitly trust LL as a financial entity.
1a2. Trust and 3rd party financial institutions - again, those who ALREADY HAVE accounts with 3rd party financial institutions have surmounted the trust barrier with these companies. Regardless of the risk, such residents are willing to take the risk involved in entrusting these companies with access to their financial well-being. So far, I haven't heard of that trust being broken from the business side.... only from the "fraudulent account" side.
1a3. Trust extension - Consequently, LL seems to be offering to extend or link two already established trust relationships into a single one where at least some residents have verified both links to their own satisfaction.

1b1. Convenience. By putting a link in the UI LL seems to merely be prpoposing a convenience - not a change in the economic system within SL itself - except by a huge stretch of (my) imagnination.
1b2. Newbies routinely complain about complexity of SL's "system" during their first few sessions - at least that is not an uncommon comment for me to hear in the Ahern Welcome Area.
1b3. Easing the method of obtaining more money - however that is accomplished - is theoretically a good thing - whether for oldbies or newbies.
1b4. With respect to convenience alone, the effect on third party companies is not something residents (IMHO) should concern themselves with. Let the management of these companies steer their own ships.
1b5. With respect to convenience and LL liability issues, I am not a lawyer and unless any other resident IS one, with experience in the banking and tort fields, I don't think it is productive for residents to theorize liability issues for LL.... again... strictly my opinion. If Philip/LL cares to take on the risk... that is a business decision LL makes (I don't ask Ford about their risk management poliicies and practices when I consider making a loan for one of their cars). Liability issues are something LL needs to worry about and do not seem to be connected to the core issue of convenience.

2. IGE/GOM and their relationship with LL - I don't have any control over that or any real input except with my $USD. As such, since my paltry $USD/$L totals are so small, if LL wants to establish a business relationship with such companies so that it conveniences my SL experience, good for me.

3. I don't see any real drawbacks with respect to MY EXPERIENCE if a U/I adjustment was made to enhance quick RL-LL-RL exchanges. IF a transaction is successful, I don't think abou it once completed. If it fails, THEN I consider the risk/blame/consequence questions - from MY perspective, not from that of the other participants. I am a resident/trader ... not the financial partner I am dealing with. My responsibility stops at my credit card/bank account. They are responsible for their ends.... that's the return/tie-in to the TRUST point.

4. So... go for it. Newbies will accept what is offered. Current residents can choose to use the new feature or not - perhaps continuing their present relationships with the 3rd party companies, perhaps not. Simply doesn't matter to me what relationships other residents choose to have with respect to their financial partners. I take care of MY WALLET. Others are responsible for theirs.

Couldn't have said it better.

I think in one respect its a great Idea however on the Liability side of the coin Id say no as someone mentioned earlier considering states and countrys policys on gambling this could be a big no no for everyone involved.

By keeping GOM and IGE and any other organization that pops up to trade currency seperate keeps Players/Linden Lab and third party organizations seperate from any govermental intervention.

Combining them could get into some really sticky red tape and personally I think Neither LL nor any player wants to be involved in that.

Sincerely, Shadow

Supporting 3rd party web-based "add-on" services is in the best interest of Second Life - so much depth has been added inWorld from some of the web sites that have been created.

I believe LL is committed to us showing them what can be done to build the financial infra-structure which will make our community both truly unique and help grow a mature economy fostering exciting new types of commerce.

These innovative efforts take a significant investment of talent, time, skill resources and personal risk. And yes trust continues to be central as it was when the SL currency exchanges and LL authorized resellers first opened on the web.

Our community was welcoming of the notion of trusting others with their resources, and I believe as SL community matures we will see more examples of this and more people working to build ways and means to do new and exciting things.

Escrow Services - Helpful to Second Life Economy

Remembering how early it is in our history we will one day look back at these early concerns with that confident certainty born from the realization of our combined efforts.

Thus our world is built.