Publisher-sponsored in-game commerce platform PlaySpan has acquired PayByCash, an alternative payment system for online games, virtual worlds, and social networks.

Established in 1998 and supported in over 200 gateways, PayByCash provides a network of 70 different payment methods. The service handles all payment-related customer support, foreign exchange complexity and risk, fraud protection, and maintenance of payment system integrations, while providing reporting and accounting to its merchant clients.

PayByCash will continue to operate independently with offices in Charlottesville, Virginia and Cincinnati, Ohio. The company intents to release PaxGuard, a new offering for fraud protection, in August 2008.

Based in Silicon Valley and backed by a $6.5 million investment from Easton Capital, Menlo Ventures, STIC, and Novel TMT Ventures, PlaySpan delivers in-game search, commerce, and micropayment technologies to game publishers and developers. Gaming platforms, such as K2 Networks and Gala Net, have selected PlaySpan as their official marketplace for virtual goods commerce.

Said PlaySpan CEO and founder Karl Mehta: “PayByCash’s 10 year reputation in the global game industry, operational experience of millions of transactions each year and the trust of millions of gamers make the service a great addition to our in-game marketplace platform. We are excited about the synergies of our businesses and will continue to promote PayByCash’s global payment platform to our publisher partners worldwide.”