Kwedit Brings Loans To Virtual Goods Market

Kwedit, a Mountain View – California based startup, wants to simplify the purchase of virtual goods for teens. The company plans to allow teens to buy virtual goods on Facebook games such as “FarmVille” and “Café World”, if they commit to pay later at 7-Eleven stores or send in money via mail.

Kwedit’s premise is that Facebook games are mostly played by teens, who dont have access to credit cards or paypal accounts. Since Facebook games only support credit cards and paypals, this effectively shuts out these teens from purchasing virtual goods.

Zynga, which has more than 200 million users and racked in revenues of around 200 million in 2009, has disclosed that only 1% of its user base currently buys virtual goods. Imagine the impact on Zynga’s revenues if that percentage could be moved up to 10% or more. This is exactly what Kwedit wants to accomplish. Kwedit believes that Facebook Gamers want to purchase virtual goods, but they simply cant do it at the moment.

According to Danny Shader, Kwedit’s chief executive officer, who previously sold Good Technology Inc. to Motorola Inc. and to Inc:

There is a group of players out there who would pay if they could pay. We can drive a ton of revenue to the Zyngas of the world.

Kwedit plans to provide revolving credit to teens, so they could access virtual goods worth a certain amount before they are forced to pay. If they don’t pay up at their nearest 7-Eleven, they wont be able to buy again. Since Kwedit would be partnering with the likes of Zynga’s, no money would be lost since every thing is virtual. Such is the age in which we live – Goods are virtual, yet profits are real.