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What if we all start to accept dollars, euros and yens in our IW stores?


Madeliefste Oh
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It is a tradition to sell your merchandise for L$, it is also the most easy way to do business in SL. But with the new TOS, it might become interesting for merchants to accept RL money in stead of L$.

For customers who are no longer able to buy L$, it could be a solution to buy virtual goods or in their own currencies.

As far is I can see there is nothing in the TOS that obligates a merchant to charge L$ for his merchandise.

A micro payment system, like for example Google Wallet, could be used to pay and receive small amounts.

 

Would it be realistic? What are the pros and the cons in your opinion?

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You could, yes. At least until LL "tried" to add a restriction to the TOS that items that are under your copyright and ownership by their admission are no longer able to be sold without L$ (good luck with them attempting that one).

For instance Paypal Micropayments charges $0.05 (a mere 5 cents) plus 5 percent.

In practice, you could actually make more money via Paypal directly than you could using L$, if your customers would use it.

There are other payment providers doing micro-transactions these days as well.

The bottom line is that LL uses Paypal as well, so you're paying two people to chip away at your money currently ... LL and Paypal.

At this point, LL is becoming more of an unnecessary middleman, providing more of a convenience for in-world spending and to provide in-world user to user giving/receiving of money without a transaction fee.

As always though, people will pay more for convenience, so using outside payment providers would have to gain traction with customers.

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I personally do not think that a micro payment system will work inside sl for merchandise. When users buy L, they use real world currency to purchase it, and then forget about the transaction because they now have L to play with and spend as they please without really thinking about what they are purchasing. If users are forced to use RL currency for each and every transaction, I think the economy will tank because it will force users to think about each purchase before they buy as they are parting with RL currency for each transaction, where as before they had already parted with their their RL currency only once when they bought L.

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I don't mean to accept RL concurrency in stead of L$, but as an additional service. People who can still buy L$ have no problem, they can use those for the payment.

The only alternative those people have now is paying with USD on the marketplace. And LL takes it all, leaving us the Monopoly money that we must exchange at the Lindex, paying 3,5% for the exchange service.

I think we might be able to beat that marketplace USD price in our in world stores.

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Pros:   Keep customers who don't have credit cards on PP and no longer can buy Linden.  If there is a good way/vendor in SL that can link to multiples of payment options. 

I would like to see the same at minimum that a famous blog software beginning with W marketplace plug in supports.  If a vendor could find a way to link into a famous blog software beginning with W Marketplace that would be awesome imho.   That way we can display items on our blogs, but also in world.  Even better if somebody could develop a wider famous blog software beginning with W plug in that is a marketplace with SL specific functions (like a merge with Caspervend).  

Cons:  RL versus SL.  It needs to be linked to the RL name.    Most wallet systems will require the company name and secure RL data.   So all your customers get your RL details.   (I have no issue with that personally).

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LL could not allow this either if the money is in any way transmitted through SL, for the same reason they shut down the TPE's, which is new US treasury regulations.  My vendor system could take RL$ payments but was forced to shut down that service just like the third party exchanges.

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If we could accept real currency (Don't LL allow people to pay by PayPal on the MP already?) it would be US Dollar because that is the universal currency.

It sucks from a merchants POV unless you're from the USA because like me from the UK I lose half of the value of a dollar when converted to my British Pound.

But it's great for the consumer from the UK because everything is around 50% cheaper than if the  product was for sale in pounds.

I recently had a negotiation with a Shopify developer who advertised in US Dollar. When we spoke on the phone, the US price suddenly changed to the British pound because he was from the UK and he obliviously learned I was too. 

So I asked him in a follow up email; "Had I been an American customer, I am assuming you would not change the price from US currency to British Pound?"

He never, replied. Because he couldn't reply, because he knew I had a valid point and he was unethical in doing what he had just to gain more in value than what his US dollar advert would have given him. 

So, I am now in negotiations with a US developer who deals with US dollars. 

Also, I buy Filterforge and all of its updates. They advertise in US dollar but when I go to pay by PayPal the exact same number in dollars changes to pounds! (£) I wrote to him about this and he/she claimed it was a tax thing and he would get in trouble if he did not charge in the currency of the customers residing country. I was livid but eventially gave in and purchased the upgrade. 

Never had that particular issue before and I do a lot of purchasing online for software and graphic related materials. 

Its complex I guess is what  I am saying and a whole lot easier for SL if we stick to L$ :) 

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Alexxis DeCuir wrote:

I personally do not think that a micro payment system will work inside sl for merchandise. When users buy L, they use real world currency to purchase it, and then forget about the transaction because they now have L to play with and spend as they please without really thinking about what they are purchasing. If users are forced to use RL currency for each and every transaction, I think the economy will tank because it will force users to think about each purchase before they buy as they are parting with RL currency for each transaction, where as before they had already parted with their their RL currency only once when they bought L.

I think there is a lot of sense in that paragraph. 

There is only one transaction to consider and ponder over and that's the initial purchase of the Linden Dollar.

Once they have that in their avatar purse, so to speak, the deal is done. All they have to think about then is making it last as long as possible.

As soon as you start placing £ $ (And other currency symbols that my keyboard doesn't have) then you are constantly reminding customers that this is real money, real money that they should/could be spending on real things like food, utilities and gas for their cars etc

We're in a recession (Just incase anyone doesn't know lol) and right now consumers are worried about over spending and every RL purchase is considered and re-considered and then put or  put on hold and then the purchase goes cold and they decide not to purchase it afterall. 

There is a certain psychology to virtual worlds and associatecd marketplaces, it's not "reality"  It's an escape..a hobby...why have flashing currency symbols everywhere to just remind them:  "HEY! wake up Mr & Ms RP - This isn't a fantasy world after all,  it costs real money!"  WARNING SIRENS!! 

:D 

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Madeliefste Oh wrote:

It is a tradition to sell your merchandise for L$, it is also the most easy way to do business in SL. But with the new TOS, it might become interesting for merchants to accept RL money in stead of L$.

For customers who are no longer able to buy L$, it could be a solution to buy virtual goods or in their own currencies.

As far is I can see there is nothing in the TOS that obligates a merchant to charge L$ for his merchandise.

A micro payment system, like for example Google Wallet, could be used to pay and receive small amounts.

 

Would it be realistic? What are the pros and the cons in your opinion?

Not to sound too pesimistic, but most Europeans who were using other exchanges are probably leaving SL right now, for a while or for good. 7 or 8 friends of mine said that they're gonna be laying off SL for now and maybe explore other grids. To add one thing, if you're accepting RL money from EU citizens you might have to charge VAT tax additionally, which varies from country to country but can reach up to 21%. So an item that would cost 1$ to an American, would cost 1.21$ to an European, and there's all the bureacratic hassle with European tax authorities.. This is why it's more convenient to use play currency and that's also one reason why many Europeans are using Liberty Reserve or Webmoney, systems European authorities don't care about.

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Wasn't those vendors using a TPE though to wash your payments - I thought I read that but I could be wrong?  

I would not think that using (one example) -  Google Wallet directly is the same thing - it's not an exchange however if using for GBP and UK Customer- it is regulated by the FCA and defined as a electronic money institution (same as PayPal is).   Basically they are approved for the regulated activity of issuing electronic money. Again a merchant would not need to charge VAT until they reached the threshold or can do so voluntarily prior to that.

For other countries yep then more complicated but vague memory is Google Developer lets you set the VAT and display it for each country in a simple configuration - takes a few minutes in the overall set up process.   Then when a customer has an account it knows location and displays/prices accordingly.

It's not transmitting money through SL in my opinion whilst the product may be delivered in SL.   The pament and processing are fully done in Google Wallet external.  The vendor would bring up a web link the user clicks on, links to their Google Account, submits the payment, get's confirmation, and in SL a product is there fired off to them.    The only SL interaction is the vendor checking the payment was made then sending a product to the customer.

Again the biggest con however in RL data, not only is the merchant RL information provided, the customer's is too - and that's why regardless of the above I suspect this is never going to be feasible.  People don't want to give out RL data to any random merchant.

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EDIT- Sorry, Charlotte, I was just expanding on what you said :)

People selling goods under alias SL account names who are apposed to declaring their real name and address to anyone other than Linden Labs (and that's only those that have Payment info on account) can not expect "cash" payments. 

I suspect the majority of people in SL selling digital goods and "cashing out"  have no desire to fall under the TAX radar and as soon as you accept PayPal payments,  you will, by default. 

Then you have to pay an accountant and it costs me £600 a year just to work out I owed £16 to UK tax department on my last end of year filing.

So, its easier all round if LL take care of the VAT and deal with the legalities of accepting micro payments etc... That's what their % of each sale and % from LindeX

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I don't know - most merchants I know are registered and pay tax on their income.   The hobbyists - perhaps not so much.

Your accountant is expensive!  I use a small firm in Shoreditch and pay about 350 PA but I do a lot of it myself so probably why - they are however worth every penny as they get my deductibiles all in reducting my tax exposure.

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Rommanno wrote:

 

Not to sound too pesimistic, but most Europeans who were using other exchanges are probably leaving SL right now, for a while or for good. 7 or 8 friends of mine said that they're gonna be laying off SL for now and maybe explore other grids. To add one thing, if you're accepting RL money from EU citizens you might have to charge VAT tax additionally, which varies from country to country but can reach up to 21%. So an item that would cost 1$ to an American, would cost 1.21$ to an European, and there's all the bureacratic hassle with European tax authorities.. This is why it's more convenient to use play currency and that's also one reason why many Europeans are using Liberty Reserve or Webmoney, systems European authorities don't care about.

The VAT issue is indeed a point of concern. Not that I don´t want to pay VAT, but it brings in a lot of extra administration, when you have to declare VAT to the taxes for all those micro payments.

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Charlotte Bartlett wrote:

 

Again the biggest con however in RL data, not only is the merchant RL information provided, the customer's is too - and that's why regardless of the above I suspect this is never going to be feasible.  People don't want to give out RL data to any random merchant.

I agree with you, this is the biggest con.

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LillyBeth Filth wrote:

 

I suspect the majority of people in SL selling digital goods and "cashing out"  have no desire to fall under the TAX radar and as soon as you accept PayPal payments,  you will, by default. 

 

Ah, I think you have hit the nail on the head. 

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Charlotte Bartlett wrote:

Wasn't those vendors using a TPE though to wash your payments - I thought I read that but I could be wrong?  

I would not think that using (one example) -  Google Wallet directly is the same thing - it's not an exchange however if using for GBP and UK Customer- it is regulated by the FCA and defined as a 
electronic money institution (same as PayPal is)
.   Basically they are approved for 
the regulated activity of issuing electronic money.
 Again a merchant would not need to charge VAT until they reached the threshold or can do so voluntarily prior to that.

For other countries yep then more complicated but vague memory is Google Developer lets you set the VAT and display it for each country in a simple configuration - takes a few minutes in the overall set up process.   Then when a customer has an account it knows location and displays/prices accordingly.

It's not transmitting money through SL in my opinion whilst the product may be delivered in SL.   The pament and processing are fully done in Google Wallet external.  The vendor would bring up a web link the user clicks on, links to their Google Account, submits the payment, get's confirmation, and in SL a product is there fired off to them.    The only SL interaction is the vendor checking the payment was made then sending a product to the customer.

Again the biggest con however in RL data, not only is the merchant RL information provided, the customer's is too - and that's why regardless of the above I suspect this is never going to be feasible.  People don't want to give out RL data to any random merchant.

The problem is that LL can not allow their software or any scripted object in SL that will trigger any kind of money exchange without assuming responsibility for it.  So a vendor that triggers a payment form a payment service would not be allowed.  

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Another issue might be buyers protection and sellers protection. This give possibilities to scam.

For example in Paypal you have only sellers protection when you trade tangible goods. The seller protection does not count for virtual goods.

A worst case scenario: a buyer comes to your shop and buys every single piece of your merchandise, and pays through Paypal or another third party that you use to receive money. After a few days he alerts Paypal that he did not receive anything, then it is up to you to prove that you actually did deliver that goods to Peter Johnson. You did not send anything to Peter Johnson though. So how are you going to proof that xXxBloodyCustomerxXx who you delivered some fantasy goods in a fantasy world is the same person as Peter Johnson?

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Alicia Sautereau wrote:

When it is a webshop with an inworld delivery service then you aren`t an exchancge, otheriwse all estates that accept tier with paypal or CC would fall under the same restriction
:)

You are absolutely right if a customer was shopping directly on a website.  However I was responding to someone's suggestion that a vendor could be used in SL that "would bring up a web link the user clicks on, links to their Google Account, submits the payment, get's confirmation, and in SL a product is there fired off to them." 

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Then you would still needa web page to proccess the transaction and send the confirmation inworld so you endup with a webstore aswell

To have abit more fun with it, you create a webstore, each product has it`s id and you get your own vendor system inworld with displays being the id
With some more tech stuff behind the scene, you have merged your inworld and web store, play abit more with it and use the ans function for the mp and your store is complete ;)

LL can`t do anything as you just offer 2 ways to buy items and not exchange $ to l$ as you deliver a product

 

Playing abit more with the idea and you get this:
http://community.secondlife.com/t5/General-Discussion-Forum/Why-Linden-Lab-will-not-get-my-money-anymore/m-p/1998791#M105506

:)

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