The alternative payments provider Dwolla has garnered much attention from its recent move to facilitate payments through Twitter, but the concept has been tried before — repeatedly, and with few success stories.
Another major contender for Twitter payments is Chirpify, a Portland, Ore.-based company, which started as Sell Simp.ly by Chris Teso in May 2011. Teso’s company got the funding, developers and rebranding it needed in February 2012 from UpStart Labs, also in Portland.
Dwolla is clear that it does not intend Twitter to be the new focus of its service. Dwolla, of Des Moines, Iowa, was founded in 2008 to facilitate inexpensive online payments to consumers and merchants. It describes its Twitter payment feature, called #dwolla, as just an additional tool meant to make its system easier to use.
"In the real world, we transact with our names and faces, not bank account numbers or email addresses, so this new opt-in tool, #dwolla, is a natural extension of that realization," says Jordan Lampe, Dwolla spokesman.
The #dwolla code is a hashtag, a way of representing a keyword on Twitter to establish trending topics that are easy to search. In this example, the hashtag signals to Dwolla that someone is attempting to initiate a payment. The tweet must also contain the payment amount and the recipient's Twitter account name.
Twippr, founded by Paul Boulton in Newcastle, England around 2008, facilitated payments via Twitter in much the same way. Twippr's website still says the service is in testing, though it has clearly gone dormant.
“Twippr was a payment experiment that I've not pursued in over a year and it’s unlikely I'll be doing anything more with it in the near future,” Boulton says in an email. Boulton would not comment further on the company.
TwitPay also launched in 2008. The service allowed peer-to-peer payments by tweet. The company, founded by Michael Ivey and Don Brown, scrapped its original business model in 2010.
The TwitPay patent is now owned by Acculynk, an Atlanta, Ga.-based company that provides Internet PIN debit processing for online and mobile commerce. Acculynk says it will be using the social media aspect of TwitPay as part of its mobile payment strategy next year.
Twitter has worked for Chirpify, however, and the company is adamant that it will succeed where others have stumbled.
Chirpify allows users to send money through Twitter or Instagram after linking their PayPal account. To purchase an advertised item with Twitter, users reply to a tweet with the word "buy." With Instagram, they post the word "buy" in the comments on a photo.
Since Chirpify’s launch, large brands and celebrities have used the service, including Keen Inc., Taco Bell and musician Amanda Palmer. In August, Palmer received 320 “buy” replies on Twitter in 48 hours about a shirt she was selling, according to Chirpify's website.
“Chirpify is built for businesses through its business dashboard, deep integration with existing e-commerce storefronts for back-end fulfillment, listing and transaction management,” says Teso.
By comparison, “Dwolla’s P2P platform is a nice feature to exchange money on Twitter with friends,” Teso says. While the two services look similar, Teso says that after being on a panel with Dwolla CEO Ben Milne this year, he sees Dwolla as a complementary product.
Dwolla seems to agree with this comparison.
Lampe says the #dwolla service doesn't offer the wide range of features that Chirpify does. "They're really focused on injecting a viable e-commerce experience inside the social stream, while we're cruising on top of it," he says.
Consumers wanting to put a message behind their payment and make it publicly seen, such as charity donations, could benefit from the service, says Dave Kaminsky, an analyst with Mercator Advisory Group.
"It could work well for peer-to-peer payments," he says.
But do most consumers want their transactions posted on social media for the public to see?
"I don't foresee payments via Twitter [becoming] something you use for Amazon transactions," Kaminsky says.
In Dwolla's example, the Twitter payment service came about because a Dwolla developer wanted the capability, "so he built it," Lampe says.
For Dwolla, the application might not be about what consumers want but more about free publicity, says Kaminsky.
"While #dwolla provides some creative marketing opportunities and benefits, these experiments are meant to inspire new ways to use our developer-friendly network," Lampe says. "Dwolla in #dwolla could easily be contextualized for disaster relief or marketing campaigns."
Since the feature went live, Milne has been tweeting to celebrities, including tween heartthrob Justin Bieber and crazy pop princess Lady Gaga, to seemingly get the word out on the stars' feeds.
"It's important to allow customers a variety of ways to send money," says Jacob Jegher, senior analyst at Boston-based Celent.