Second Life’s forthcoming Local Payments system has attracted a couple of key concerns – aside from some more obvious issues about it kind of not working all of the time.

One of the things you’ll hear circulating about Local Payments is that the payments processor cannot handle Paypal accounts for non-US users. This actually isn’t true. The payments processor (888/Dragonfish) handles this sort of thing just fine. During the beta, however, there have been some software implementation problems between Linden Lab and 888/Dragonfish. These problems are not, apparently, indicative of the payment processor’s ability to deal with Paypal.

The other issue is that some users simply don’t want to pay in their local currency. In my case, for example, most of my Second Life work ultimately gets paid in US Dollars. I’m not the only one. Many Second Life merchants and consultants who live outside of the USA either cash in Linden Dollars for US Dollars or are paid directly in US Dollars.

To then pay Linden Lab in their local currency (Euros, Australian Dollars, Pounds, or whatever) would then require wearing the conversion costs of US Dollars to their local currency and back again. Hardly an ideal situation, and one which could well raise the costs for any non-US user who is actually making money out of Second Life.

Thankfully, the Lab says that this won’t be an issue. I spoke to a Lab spokesperson about the matter last week who commented on behalf of the Lab:

When rolled out, all international payments will go through the new system. Within the system, international customers will be able to choose to pay in one of a number of currencies, depending on the payment method they choose from those available to them. For example, with the new system, a UK-based customer who chooses to pay with a Visa card could choose to pay in GBP, USD, or Euros (among several other options).

Yes, there’s still a little bit of ambiguity there, but it shows that the Lab has been thinking about how Local Payments is practically going to work for people in practical situations. It certainly isn’t in the Lab’s best interests for Second Life’s non-US money-makers to wear unnecessary additional costs, if those costs can be entirely elided.

Of course the Local Payments system is still in beta at the moment – that’s the new notion of beta (which means ‘incomplete’) as opposed to the old notion of beta (which means ‘finished – but probably still buggy’). Quite how long it will take for Local Payments to reach the state described above is anyone’s guess right now. (The Lab says late July)

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Tags: 888, Dragonfish, Euro, Linden Lab / Linden Research Inc, Money, Paypal, Second Life, Second Life Local Payments, US Dollar, Virtual Environments and Virtual Worlds, Visa Card