As major financial services providers sever ties to WikiLeaks, a little-known alternative payments startup in the U.K. has stood by the embattled organization.
Flattr Networks Ltd. specializes in what it calls social micropayments. Think of it as a cross between PayPal and the "like" feature on Facebook: users "Flattr" websites by sending them money from a stored-value account. Having a Flattr button on a site allows individuals to make small donations without entering account details for each payment.
Flattr's refusal to cut off WikiLeaks underscores the raison d'etre for alternative payments firms: many consumers want a way to send money to organizations that don't (or, in this case, can't) take conventional credit or debit cards.
"Essentially, merchant acceptance is the top reason that consumers use alt-payment methods," said James Van Dyke, the president and founder of Javelin Strategy and Research. "With regard to WikiLeaks, we have a classic merchant acceptance situation."
However, Flattr says it took the stance on principle, not as a marketing move.
"We are not here to be a political organization," said Eileen Burbidge, an investor in the network's parent company, Flattr AB of Malmo, Sweden, who handles its business operations in London. "We aren't leaving the [WikiLeaks] account open simply for PR, or additional exposure. It is important for us. We don't see it as our place to close it down."
Of course, Flattr is making money through its continued affiliation with WikiLeaks.
Flattr takes a 10% commission on all of the funds that users donate.
As of Thursday afternoon, WikiLeaks' Afghanistan War Diary 2004-2009 post had been "Flattr'd" 3,471 times. Burbidge said she could not say how much cash has been donated to WikiLeaks through Flattr.
This month, Visa Inc., MasterCard Inc., Bank of America Corp. and eBay Inc.'s PayPal Inc. stopped facilitating payments to WikiLeaks after the group published confidential government documents.
These companies, and others, cited contractual terms prohibiting partners from committing or encouraging illegal acts.
The major payments brands' boycott of WikiLeaks "is an opportunity for alt-payments providers to gain a toehold," Van Dyke said.
In Javelin's research, he said, "nearly one in two consumers reported that they used an alternative payments method because of the ability to make payments at sites that don't accept debit or credit cards."
And there is no doubt Flattr has been recognized.
For being the last payment company to continue working with WikiLeaks, Flattr has garnered mentions in articles about WikiLeaks in The Atlantic, Forbes and the New York Observer.
"Integrity has a lot to do with it," said Brian Riley, a research director in the bank cards practice at TowerGroup. "Yeah, sure, small companies can fly under the wire and facilitate things. … But, if people do illegal things or marginally illegal things, and you are dealing with financial services, where do you draw the line?"
Flattr was founded by Peter Sunde, who is best known for co-founding The Pirate Bay, a well-known BitTorrent tracker site. His goal with Flattr was to allow Internet users to offer money for otherwise free content.
Users designate how much they want to donate over the course of a month, and that money is divided up among the pages where they clicked the Flattr icon. A Flattr account with a $5 balance could provide a dollar to each of five sites a user has clicked, for example.
Though WikiLeaks does not host Flattr buttons on its site, donations can be made into WikiLeaks' Flattr account through a tool on Flattr's own website.
WikiLeaks did not respond to a request for an interview.
Burbidge said the government has not pressured Flattr to end its relationship with WikiLeaks. "If we ever thought, or started to contemplate closing their account we would have much bigger issues," she said. "This is something that, you know, is a part of our ethos. … We have a really strong feeling that we aren't a judge and jury."