Kwedit is one of the more promising alternate payment methods for social gaming and other virtual good sellers online. If you don’t have a credit card and don’t want to get into the offers/scamville stuff, you don’t have a lot of options. Kwedit allows you to make a promise to pay later – by dropping by a 7-11 and paying cash, or just mailing cash in. If you don’t pay the money back there’s no enforcement against you other than being kicked out of the system.
It first launched in February – see our post describing it as the “first completely unreliable payment network.”
At launch time the company told me they had absolutely no idea what percentage of people would pay back Kwedit promises because they hadn’t tested the product yet. Since virtual goods are free to create and sell, though, there wasn’t much downside for the seller. The only problem would be around cannibalism where a user chooses Kwedit instead of paying directly even though they have a credit card.
In March the company released early repayment data – 26% of promises were being repaid. Tomorrow the company will release additional data as well. Highlights include:
- 1/3 of the dollar amount of promises to date have been repaid.
- The rate is increasing because “good” users are kept in the system, non-payers are blocked. Just less than 20% of initial promises are repaid. Second promises are repaid at a 72% rate. Subsequent promises repayment rates are even higher.
- Of promises that are repaid, 22% are repaid in the first 24 hours. 66% are repaid within the first week.
- Kwedit says that almost all Kwedit users were not previously using other payment methods.
- Overall, publishers using the system are seeing a 5% jump in revenue, and Kwedit says they think that will get to 10%.
What all this means: The Kwedit experiment seems to be working and is a viable additional payment option for game publishers. Turning away an additional 5%-10% in revenue just isn’t going to happen. Look for more publishers to add Kwedit in the near future.
Update: The Kwedit blog post on this is here.