If you turn on your Xbox 360 console today and get prompted to apply a system update then you are getting ready to participate in the retirement of Microsoft’s Points program.

According to a newly posted FAQ at the Xbox.com Billing and Membership site this update will now provide a single point of payment across your Microsoft account devices and services:

As part of the recent Xbox 360 system update, Microsoft Points are being retired, and transactions on Xbox 360 are taking place using your local currency* instead of Microsoft Points, offering you a new, convenient way to purchase exciting Xbox content. This change allows you to use a single Microsoft account to purchase content from your Xbox 360, and apps from the Windows Phone Store for users with a Windows Phone 8!

The ability to purchase in your own local currency will be available in over 40 countries and should eliminate the confusion that often existed when purchasing games and DLC on the console.

Microsoft also promises that when you make that first purchase after this update, which will initiate the conversion of your current points into currency, the amount you receive will be of an equal or greater value of your Microsoft Points.

Any Microsoft Point cards you buy at retail will still be functional but the points will be immediately converted into currency for deposit into your account. You can also expect currency related cards to be available both online and in retail locations later this year.

Read the entire Microsoft account transition to local currency FAQ.