It’s been a long rumor in coming but it’s finally been confirmed that Microsoft Points are being phased out in favor of cash transactions and it’s going to start with Windows 8. Microsoft has already started to remove MS Points as the default purchase method for buying software, and renting music, and movies, according to an article appearing in The Virge’s Polygon blog.

Early in 2012, it was rumored that Microsoft would be doing away with Points on their Xbox platform, and the rumor included that they would be chucking the virtual currency before the end of the year. So far, it looks like this rumor is on track for its own timeline. Of course, even Xbox doesn’t use MS Points for all of its downloads and software products—opting instead for ordinary money for digital games, whereas DLC is often bought for MS Points.

Originally, Windows 8’s app store appeared to use MS Points for software, downloads, movies, and music; but more recent builds of Windows 8 appear to allow users to eschew Points for U.S. dollars.

In our own testing in the final copy of Windows 8, we are now able to pay for music or purchase and rent movies in the Xbox Video store by using a credit card. You’re still able to use Microsoft Points, but the store defaults to credit card transactions.

Although the concept of Points—or some other virtual currency—is extremely common in the free-to-play universe, it was a yet-unknown buying method for many Xbox uses before it was introduced to the Zune and then to the gaming console. Under the Points system, it’s necessary to purchase 80 points for $1 and as a result, many users would find themselves buying more Points than they needed for a product and generally having left overs.

Removing the necessity of Points in the Windows 8 app store heralds the rumor of possibly showing that Microsoft is looking to eliminate the Points currency eventually.

Many Xbox consumers are looking forward to this as a good move by Microsoft because of the confusion caused by the Points system and because of the DLC vs. downloadable content dichotomy in payment systems. While it might make sense to keep the two systems together, it seems unnecessarily confusing to have products can only be bought for one or the other.