American Express and Zynga, the world’s largest social game developer with popular games on Facebook,  announced a strategic partnership allowing customers to redeem limited edition virtual goods, in addition to physical and virtual game cards for Zynga’s titles using Membership Reward points. The partnership will also bring in other exclusive offers to both companies.

“Our relationship with Zynga, one of the key players in the digital space, marks a new redemption category for American Express and reflects our ongoing commitment to expanding and deepening the value we offer customers online,” said Dan Schulman, Group President Enterprise Growth, American Express.

“With millions of Cardmembers looking to use Membership Rewards points, Zynga can now offer our loyal customer base an exciting new way to engage with their popular social games.”

American Express has forged a new strategy that has never been done before by any financial services provider.  Only Card members who are enrolled in the Membership Rewards Program can use the points to purchase virtual goods from Zynga, which includes exclusive FarmVille manors and windmills, Cafe World fountains and stoves, and YoVille roadsters and robots.

“Our partnership with American Express marks the first time that virtual goods are available for purchase with rewards points and reinforces our commitment to offer consumers meaningful experiences that enhance their game play,” said Vishal Makhijani, SVP of Business Operations at Zynga. “Cardmembers can instantly redeem their reward points to purchase limited edition virtual goods for their favorite Zynga games.”

Redemption offers start at 200 points, and game cards can be used on several Zynga games. Goods available include: a FarmVille Purple Cow (540 MR points) FarmVille Manx Cat (435 MR points) Cafe World Amex Lightning Stove (1945 points) Cafe World Amex Outdoor Fountain (1080 points) $25 and $50 physical game cards (2500 and 5000 points); and $2, $10 and $25 virtual game cards (200, 1000 and 2500 points).

Redemption offerings are expected to increase in the next few weeks. On December 6, 20 virtual goods will be added including FrontierVille Fancy Gold Hot Tub, FrontierVille Fancy Gold Fountain, Treasure Isle Zebra, and FarmVille Golden Retriever.

This is an important development for Zynga, as it expands across the world, and through network partnerships.  This gives American Express even more access to consumers as they jump into the virtual goods market.  It’s a move that came early enough for American Express, considering its conservative take on most trends.  The screws are tightening, as even Google‘s entering the game earlier than expected, with plans for an embeddable mobile device chip that can be tied to various financial services.

And it’s not just American Express, but credit card companies in general that have been making their way into the virtual world. Visa recently teamed with Kiva for social giving and virtual goods, while MasterCard has made some key acquisitions in the space.  This means American Express is facing the pressure of changing payment options used for reaching consumers.  The competition is getting intense, and it’s a new ground for the financial industry all together.