This story is from the category Business
Date posted: 30/01/2007
Project Entropia, the massive multiplayer online roleplaying experience, always the first to do the most daring things in the name of virtual currency, has received a wrist-slap for its most recent gesture: Credit cards funded from in-world funds, to be used in the physical world.
Instead of paying a subscription fee, Entropia ?s users buy in-world currency, called Project Entropia Dollars, which can be spent to buy in- world items like weapons or clothing. MindArk- the world?s creators - sells 10 PEDs for a dollar. And users don?t necessarily need to buy PEDs, they can make money by starting in- world businesses, hunting or scavenging animal dung. In theory, participants have an opportunity to profit and, at any time, can convert their PEDs back to physical-world currency.
According to MindArk, $350 million circulates through the Entropia Universe annually. The Entropia Universe Cash Cards were supposed to simplify the process by letting players withdraw their PEDs as real-world currency at ATMs. Not credit cards, the Entropia cards were basically debit cards with their own fee structures: a $25.00 purchase fee, a $3.50 monthly service fee, $3.50 fee to transfer PEDs to the card, $3.50 fees for each withdrawal and a $1.00 fee if a transaction was rejected ? on top of normal ATM fees.
A bank card with its assets entirely coming from the virtual world was a novel and ground breaking idea, right up until January 2007.
In January, MasterCard announced it was no-longer supporting any ATM traffic from the card's backing financial institution, North York Community Credit Union of Ontario, Canada. Entropia was left with no choice, but to shut the system down, and refund peds to the user?s accounts.
MindArk business development director David Simmonds would not say how many cards had been issued, but he did say they were very popular and exceeded expectations. After the program crashed, he said "the money is safe and those who want to cash out will be able to do so with an express bank transfer. It's unfortunate but we'll work it out."
MasterCard's action came after the New York Community Credit Union and the card provider, CardOne Plus, had a series of run-ins with a regulatory body, the Financial Institutions Commission of British Columbia, which, in its fourth and last action, a penalty order, called North York a "rogue financial institution" having "shown complete disregard for the laws of British Columbia."
Entropia players can still acquire cash cards, though their functionality has been put on hold after the recent tumult. Simmonds said at least one bank interested in the Entropia banking licenses (which he wouldn't name, other than to say it's one of the biggest in the world) might also begin handling transactions for the cash cards.
"Without a doubt the ATM system will be back and fully functional," Simmonds said.
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