PlaySpan Acquires SpareChange Micropayment Service

By Alicia Ashby On April 21, 2009 · Leave a Comment

Today the payment solution company PlaySpan announced that it had acquired the micropayment service Spare Change that serves a variety of games and apps running on the Facebook, MySpace, and Bebo platforms. PlaySpan also owns and operates the PayByCash payment service and its Ultimate Game Card. With the acquisition of Spare Change, PlaySpan now provides payment services to over 1,000 games and apps worldwide.

"The social networking gaming space is showing tremendous growth, making
social networks a natural market extension. Our customers span online
games, virtual worlds, and social networks, so we should too," said
PlaySpan CEO Karl Mehta.

As part of the deal, Spare Change's entire staff are staying on with the company to continue development on its core payment technologies. Spare Change grew rapidly as a service based on its technological advantages, which it says made payments as low as .10 possible and offered users lower service fees than competitors like PayPal for transactions valued at $6 and less. Acquiring Spare Change puts PlaySpan in a strong position to exploit the booming market for microtransactions on social network platforms.

"Where as early on there were separate camps for traditional gaming and gaming on social networks, those lines are blurring. More sophisticated games are being built on the social networks and traditional game companies are taking much more interest in the social space. Having a single company that understands and spans both worlds puts us in a great place to succeed in the market," explained Spare Change CEO Lex Bayer. "PlaySpan is the industry leader in the space, our technologies and services are complementary, and we believe our combined entities will enable rapid success in the gaming market."

Combined with its recent partnership with Hi5, this move has rapidly given PlaySpan a dominating reach in the world of social network
microtransactions. Spare Change was essentially designed around the notion of catering to the needs of social network gamers, who typically are interested in spending money in favorite games, but usually much less than $5 at a time. PlaySpan clearly wants to be regarded as a global leader in the payments on all platforms and this status is now very hard to dispute.

It has to be wondered what effect this deal will have on social-oriented payment service competitors that were just beginning to gain serious traction, like Social Gold. As always, there's also the shadow of Facebook's in-house transaction system looming over any serious attempt to monetize that particular social network. Of course, when Hi5 restructured to give developers a universal payment backend, they partnered with PlaySpan to do it. It's interesting to wonder if PlaySpan could at this point provide similar services to Facebook or MySpace if either network decided it really wanted them.