Inside Social Games

Allopass is the latest payment provider to go after the social networking and gaming markets, today announcing of a San Francisco office and a list of industry partners. But this is not another payments startup throwing their hat into the ring. The company is a subsidiary of Paris-based online conglomerate Hi-media Groupe, the owner of many web sites, an online advertising network, and the already-established Allopass service.

The publicly listed company operates in 9 European markets as well as Brazil and the US (and serves more than 60 in total), has more than 500 employees and brought in sales of €172.1million in 2009, or around $238 million in dollars. It intends to exert its weight against other payment companies, in a few different ways.

The first is application programming interface (API) aggregation for 9 different payment methods, like mobile, home-phone billing as well as pre-paid cards from other companies. The API can be used directly by companies, or by service providers like offer companies. Too many payment methods in one screen can cause paralysis, as Hi-media US’s chief executive Pooj Preena tells us, so the API lets developers choose the 4 to 6 that best fit the markets they are in. The company has also established relationships with many carriers, allowing it to compete against payment providers that have already gotten big in social gaming, like Boku and Zong.

The second way it competes is by using Hi-media’s balance sheet, as Preena explains: Because it has cash flow already it can do payouts quickly, in 7 to 10 days. Rivals are improving their payouts as well, but Allopass sees this short time frame as being especially attractive to the large number of small and mid-sized developers on Facebook and other platforms.

Finally, on a related note, developers can use Hi-media’s ad network to further promote their games.

Existing game clients include Bigpoint Games, Dofus, and Urban Rivals. The ones being announced today are a mix of games, social networks and offer providers

• Artix Entertainment
• Boomerang Networks
• Gambit
• gWallet
• Merscom Games
• OLX
• Peanut Labs
• Quepasa
• Sometrics
• Sonico
• TheBroth
• Viwawa
• Viximo
• Wadja

We’ll be tracking the company as it moves into the social gaming market. It’s definitely going to be an interesting year for payments in social games.