American Express and Zynga are rolling out a rewards program today that will allow players to earn virtual currency when they spend money in the real world.

FarmVille fans willing to jump through a number of hoops, including signing up for a Zynga-branded prepaid card from American Express, will earn in-game currency, similarly to how consumers earn free airline miles for every dollar spent on an airline-issued credit card.

The rewards program will first roll out in Zynga’s FarmVille game and then will expand to CityVille, CastleVille and other titles over time.

The partnership is smart for American Express since it is working hard to promote Serve, its alternative payment service that is targeting a wider demographic that goes beyond its core business user.

“It opens up tremendous opportunities to address segments of the market that we weren’t able to address with traditional credit or charge products, including the youth or underserved markets,” said Dan Schulman, American Express’s President of Enterprise Growth.

By partnering with Zynga, American Express will be able to pitch the card to a lot of new users.

The two companies started implementing the program five days ago, by offering FarmVille players the chance to visit a Serve-branded farm, where they can earn a virtual tiger. In less than a week, Schulman reports that already 500,000 people have “liked” Serve and have received the tiger.

While FarmVille is one of Zynga’s older properties, it is still one of its most popular, attracting 4.5 million unique users a day.

As I said earlier, it takes a number of steps to sign up.

First, FarmVille fans who visit the Serve farm will be prompted to plant a virtual Serve Money Tree on their farm. Then, they can register to receive a Zynga Serve co-branded prepaid card in the mail. Next, they’ll have to link the card to a bank account, debit card, credit card or cash using a GreenDot MoneyPak.

Only when all the steps are completed will they then be able to use the Serve card anywhere American Express is accepted.

Initially, American Express will reward a consumer’s first five purchases of $25 or more, but over time it expects to expand the program.

Starting later this year, Schulman said the Zynga Serve Rewards program will be able to link to deals inside of the game that can be redeemed in person. For instance, Starbucks could award consumers who have planted coffee crops a chance to redeem a coupon inside the store. Because the offer is linked to the Serve card, the discount will be redeemed automatically and consumers won’t have to remember to print out the coupon.

“It’s a closed loop for Zynga players,” Schulman said. “It’s so very different than what anyone else has done.”

Zynga’s CMO Jeff Karp said the program is not replacing the company’s current rewards program, but rather represents an extension of it. “Our goal is to build and scale the blurring of the lines between the virtual world and the physical world,” he said.

He compared it to other promotions that Zynga has done where it worked with brands, such as 7-11 and Frito Lay.

He said during those promotions, consumers were able to purchase bags of chips or other items, which had codes that could be redeemed inside FarmVille or other games. In those deals, consumers were obviously able to make the mental leap from buying something in the physical world to redeeming credits in the virtual world. Karp said the promotions experienced a redemption rate that was five to 10 times industry averages.

“What’s appealing to these brands is our 292 million monthly uniques, which is providing them with the reach of TV with the effectiveness of online and gaming,” he said.

Called Serve, it is competing head-on with eBay’s own PayPal, as American Express attempts to expand its audience beyond briefcase-toting corporate users.

At eBay, Sample was the CTO of X.commerce, the open commerce platform the company unveiled late last year that gives technology tools to retailers at no cost. Prior to eBay, Sample was a senior executive at Yahoo, where he led the open, social and participation platforms. He left Yahoo in August 2010.

Sample’s technical expertise is focused on developing and building platforms and products for emerging technologies.

Serve is a complex platform that allows consumers to make purchases, take cash withdrawals from ATMs and make person-to-person payments from their computer or their phone.

The offering is fairly complex because it can be funded by a user’s bank account or credit or debit card — even from one of the company’s major competitors, like Visa or MasterCard.

In the future, American Express envisions expanding the platform to mobile phones, using near field communication or other technology.

Given eBay and PayPal’s extensive knowledge in the digital payments arena, many of its executives have left the company to explore the endless number of opportunities sprouting up.

Recently, Alyssa Cutright, a 12-year veteran of PayPal, left to join Square, a payments company in San Francisco; and of course, PayPal President Scott Thompson left at the end of last year to join Yahoo as CEO. Last week, eBay named David Marcus as his replacement.

As far as I know, no one can steal my identity. Even if my bank account number, my credit card number and all my passwords are stolen, I am fairly confident that I will still be me and the thief will be a different person.

Yes, the criminal will be masquerading as me. But anyone who knows me–my husband, my children, my colleagues, my doorman, my employer–will not be fooled. If “I” was actually stolen, I believe that would be called a kidnapping.

The entities that would be fooled by a masquerader are ones that don’t really know me: my bank, my credit card company, places where I do online or offline shopping. Maybe they should have done a better job figuring out who I was before parting with my money or their goods.

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In letters to sent Monday to 90,000 developers who work on eBay’s Developers Program, the company warns about a security hole that could cause problems, but hasn’t yet. It also takes pains to point out that the security flaw doesn’t affect eBay customers themselves. eBay says third-party software now accounts for 25 percent of its listings.

An eBay spokesman tells me that eBay came across the weakness itself not because a hacker had exploited it, and that the company is acting “out of an abundance of caution,” which is a term the eBay folks seem to favor (see email text below). “The information that *may* have been compromised consisted of basic contact information that could potentially be used in a phishing attack. At this point, we have not identified any unusual patterns in our developer accounts and we are notifying them and requesting they change their developer passwords out of an abundance of caution [sic].”

Here’s the complete text of eBay’s heads-up letter:

Hello [redacted], this is Kumar Kandaswamy, and I manage the eBay Developers Program. I’d like you to read this important message about account safety. The safety and security of the eBay Developers Program is a top priority. While we believe that people are basically good, we also must live with the reality that there are fraudsters out there who have made it their illicit “profession” to find ways to exploit others on the Internet.

Occasionally, fraudsters attempt to gain unauthorized access to the eBay Developers Program. eBay has recently identified a means by which someone could gain access to eBay Developers Program account information. This type of access DOES NOT allow the capture of financial or other sensitive information, such as credit card or bank account information or Social Security numbers.

Fortunately, we have not detected any unusual activity with any Developer account. Out of an abundance of caution and to help ensure the security of the eBay Developers Program, we are requiring that all developers take the following steps:

* Take advantage of our new, stricter password standards and change your eBay Developers Program (developer.ebay.com) passwords. It is not necessary to change eBay (www.ebay.com) passwords. If you believe you or your customers have been the victim of fraudulent activity, contact us immediately at apifeedback@ebay.com.

Sincerely, Kumar Kandaswamy

Seems the personal data of Googlers hired prior to 2006 were stolen during a May 26 burglary at Colt Express Outsourcing Services, a financially troubled human resources outfit Google (GOOG) once used to administer employee benefits. The data, which astonishingly were not encrypted, thankfully did not include driver’s license, credit card or bank account numbers. It did, however, include employee names, Social Security numbers, birthdates, and addresses–everything an identity thief would need to open a credit card account under another’s name.

It’s unclear how many Googlers are affected by the breach, but it could be quite a few. CBS’s (CBS) CNET Networks was also affected by the burglary, with details from about 6,500 employees stolen.

“We take the security of our employees very seriously and require outside vendors to meet appropriate security standards. We review and update these standards on an ongoing basis,” a Google representative said. “Google is not currently using Colt’s services and had made this decision long before this incident.”

If that’s the case, what was Colt doing with that data in the first place?

Seems the personal data of Googlers hired prior to 2006 were stolen during a May 26 burglary at Colt Express Outsourcing Services, a financially troubled human resources outfit Google (GOOG) once used to administer employee benefits. The data, which astonishingly were not encrypted, thankfully did not include driver’s license, credit card or bank account numbers. It did, however, include employee names, Social Security numbers, birthdates, and addresses–everything an identity thief would need to open a credit card account under another’s name.

It’s unclear how many Googlers are affected by the breach, but it could be quite a few. CBS’s (CBS) CNET Networks was also affected by the burglary, with details from about 6,500 employees stolen.

“We take the security of our employees very seriously and require outside vendors to meet appropriate security standards. We review and update these standards on an ongoing basis,” a Google representative said. “Google is not currently using Colt’s services and had made this decision long before this incident.”

If that’s the case, what was Colt doing with that data in the first place?