By Sushila Nair, Product Manager, Managed Security Solutions Group, BT Global Services, PCI QSA, CISSP, CISA, CISM, BS 7799 Lead Auditor

While our real economy still struggles, the virtual economy is flourishing.  In fact, some experts predict the virtual goods in the United States could be worth up to $5 billion in the next five years. 

Virtual currency is used for purchasing virtual goods.  However, the question is, will virtual currency go beyond the world of virtual goods and into the real world?  Providing the opportunity for people without bank accounts, which includes the majority of world’s population, to buy virtual currency and then use it for online purchases is an interesting concept. 

Virtual currency was recently recognized by the Korean courts, giving people the right to sell virtual currency for real money.  Venezuela is pushing the Sucre, which won’t be printed or coined.  Instead, it will be used solely as a virtual currency to manage debts between governments. 

Why virtual currencies?  Because the benefits are bountiful.  Consumers will be able to buy the virtual currency in stores or by using their credit card or bank account. 

Gaming companies, startups and social networking companies have all been clamoring to offer virtual currencies.  The company that becomes the standard de-facto web currency stands to make an enormous amount of money on enabling transactions globally and for micro-payments.  Virtual currency and virtual goods remain among the most interesting and potentially the highest growth sectors for 2010.

Facebook could take the lead — PayPal, which has aimed to be the abstraction layer between the payment process and the merchant, is the biggest online payment company.  However, the company is just beginning to move beyond the U.S. dollar.  Facebook, on the other hand, has been working on a payment service which would introduce Facebook credits that would act as a universal currency on its platform.  Facebook is currently working to create applications in which users pay for virtual goods in Facebook credits, enabling Facebook to charge a fee based on selling its virtual currency.

Sizing up the market — The virtual goods market in the United States is estimated anywhere between $1 and $2 billion for 2010.  In Asia, the virtual goods market has already hit $5 billion and is rapidly growing.  Virtual goods range from virtual gifts such as digital bottles of champagne that users can give online in Facebook to in-game weapons users can buy so they can inflict more damage on other gamers.

Gaming sites, such as the teen site, Neopets, are using this model to cater to minors who don’t have credit cards or bank accounts.

It may seem logical that with Facebook Connect, the social networking site could offer virtual currency to simplify micro-payments, eliminating the reliance on credit card transactions and reducing the per transaction cost.  The extension from being a currency for virtual goods to smart phone applications and other “real” goods is not a large leap. 

Since PayPal failed to create a virtual currency, it isn’t surprising to see eBay, which owns PayPal, introduce eBay bucks, enabling consumers to buy real goods.

Real need for global secure payment systems — As globalization becomes the reality of everyday life, there is no doubt that payment systems need to change.  Micro-payments and varying currencies have posed challenges in a world that is becoming increasingly cashless.  Since credit cards were created for face-to-face transactions, organizations have been struggling to make them secure for online transactions.  This is proof that there’s a real need for global secure payment systems with centralized access into an account. 

So, can virtual currency move past the virtual world and focus on providing a new payment system, one that is secure and enables micro-payments, global and mobile transactions?

I am interested in your thoughts.  Feel free to leave a comment below.