Should First Meta be taken seriously?

In the scandal-ridden financial world of Second Life, there has been the rise of an interesting player since last summer. It is called First Meta. This newspaper published a few reports on the way they established themselves and their programs such as virtual credit cards called the MetaCards.

Can we take them seriously after everything we have seen, from fake banks to strangely managed financial markets? I believe there are two ways to evaluate this: the company's conduct and its business model.

The first important element is easy to take a look at, especially if you ever dealt with First Meta. Their approach to doing business has been one of the most serious I have seen in Second Life.

Before the banking ban, they paid smaller interest rates on savings than the ones they charged for balances on credit cards. This is light years away from the illogical rates that fake banks like Ginko used to pay. As soon as the Lindens banned interest payments, they quickly set up a legitimate rewards program called MetaPoints.

First Meta also does a lot to cover risks. It caps Gold card credit limits to L$10000 and requires security information to have a way to recuperate funds, should customers fail to pay their balances.

The company also put faces on its business with real people. This is another sound move since if you are going to ask thousands or millions of people to trust you with their money, you better tell them who you are! In addition, they have a superior customer service in comparison with many other players of SL's financial world.

All of this sounds good, but here's the rub: First Meta may not have great long-term perspectives with its current business model.

Their MetaCards come with shocking interest rates: 40% for the Gold card and 54,75% for the Basic card. Given that a RL card's rate can range from 10% to 30%, this is not competitive. Most adults with revenue and a Second Life should be able to get even the most basic RL credit card. If they are to pay for their SL purchases with credit, buying their Linden dollars with a RL card makes more sense. PayPal users who inject money from their bank account could care less about a MetaCard.

This leaves little room for virtual credit cards.

This makes me think that although First Meta is a serious entity, the potential looks limited. Their services are great for merchants like me. They have a good pay script that offers many functions and any purchase made with the MetaCard is one that might not have been made in cash. With good support from them. But even there, the number of SL's biggest shops that accept the MetaCard is rather limited.

Will First Meta see this and add other financial services to its offer? Or do more to recruit the merchants it needs to make it further? It will be interesting to see.