It’s an issue worthy of consideration, following the Zune music player release late last year. Consumers wanting to buy and download songs from the Zune music store are finding that their greenbacks are not accepted at Microsoft’s virtual checkout. Instead you have to convert your hard cash to Microsoft points in order to fund a purchase, with a minimum $5 exchange required to open an account.

Individual songs are priced at 79 Microsoft points, which equates to about 99 cents, in line with pricing at Apple’s iTunes music store. So your five dollars will buy you five songs, and leave a few points sitting in your account until your next purchase.

Microsoft points are already exchanged elsewhere in the virtual Microsoft universe, to pay for transactions in the Xbox 360 Marketplace, for instance.

Confusingly for the end user, Microsoft has not pegged the value of its points to a single currency. Instead, the company has assigned different values to different currencies. So, while a dollar will buy you 80 Microsoft points, the pound in your pocket translates to 120 points and the euro comes out at 67 points.

Microsoft claims the points system enables it to provide affordable micro-payments by absorbing the card processing fees on the initial higher value transaction.

In many respects, Microsoft’s virtual scrip is not unlike other private stores of value, such as retailer gift cards, or Disney Dollars.

The extension of the points system to the Zune marketplace, however, implies a determination on the part of the company to make the new currency ubiquitous in the online marketplace. How long before it is further extended to fund purchases at partner merchant sites, with a possible supporting role for Google Checkout or PayPal?

Banks, and their regulators, would do well to pay attention to activity in this emerging marketspace. Microsoft has so far adopted a stealthy, low-key approach to the roll-out of its scrip. If the points system is allowed to take hold online, it could quickly become entrenched. The virtual Bank of Microsoft might not be far behind.

This article first appeared in Finblog, Paul Penrose's personal blog on the Finextra Communities site. To open your own blog and join in the behind-the-scenes networking, click on 'Register' in the top tool bar. Existing Finextra newsletter subscribers just log in to the 'Members Area' and request an application.