The C-1 electric car is an inventive vehicle, built by a company with an inventive marketing strategy and an inventive way of accepting payments.
Lit Motors, a San Francisco-based company that's building the C-1 car, finds it vital to accept payments on Facebook because "we get much more traffic on our Facebook page every day than on our actual website," says Ryan James, Lit Motors' chief marketing offer.
"If people are going to be on Facebook that's where we need to be to do business," he says. To this end, Lit Motors works with Ribbon, a San Francisco-based alternative-payments startup.
Ribbon provides a shortened URL that clients can share in through email, websites and social networks. The company compares its service to bit.ly, the popular service that shortens Web addresses for sharing on social media.
Ribbon is "bit.ly with payments," says Ribbon co-founder Hany Rashwan.
"It's a very simple premise: keep buyers where they are to make payments," says Rashwan. When consumers click the shortened Ribbon link, they are taken to a checkout page. Ribbon also offers "in-stream" payments on Facebook, allowing users to make payments without leaving their Facebook timeline.
"If you see a link on a news page or even a fan page, you can just click on it," Rashwan says. "You put in your credit card number and you pay. The buyers never leave Facebook and we are taking a payment."
Ribbon also recently integrated with YouTube. Companies can include Ribbon URLs directly in YouTube videos through the Merchant Annotations function. Ribbon charges 2.9% plus 30 cents per transaction.
Lit Motors is building the C-1, an egg-shaped two-wheeled electric car that will have a top speed of 100 MPH and a range of 200 miles per charge. It uses two gyroscopes to keep the vehicle upright when stopped, and a kickstand that’s used when the car is parked. The car can seat one adult and a grocery bag—the equivalent of what you can take on a plane without checking baggage.
But even if the company is overflowing with engineering expertise, it needs to rely on others for payments expertise.
"[Lit Motors] is a small company, there's only about eight people on our team," James says. "I'm the closest thing we have to a payment tech person and I'm not a payment tech person."
Lit Motors markets extensively on social networks and the Web — its sites display drawings of designs, pictures of the prototype being built by engineers and photos of staff inside the car. "We use Ribbon to take payments for T-shirts with the design and other stuff we sell on the sites," James says.
Companies like Ribbon, Stripe, Dwolla and MoonClerk step in and manage the payments needs for startups. Social networking is also gaining steam as a payments venue. Other companies that tie social media to payments include Chirpify and American Express.
At Ribbon, "the revenue model is a little north of Square (Square charges 2.75% per swipe, according to its website) and a little north of some of the other social enabled payments companies. But it's not onerous and it's transparent so there is some benefit there," says Andy Schmidt, a research director at CEB TowerGroup.
Ribbon has encountered some trouble with its model. Twitter halted Ribbon's in-stream payments option a few hours after Ribbon’s in-stream payments service on Twitter launched this month. Ribbon is discussing options with Twitter, Rashwan says, and users can click on Ribbon links in Twitter messages to go to Ribbon's checkout page. Users can also initiate in-stream payments from Twitter's iPhone app, Rashwan says.
Twitter, which also recently shut down a payments program Flattr because of advertising violations, would not comment on either company.
"[Ribbon] needs to work on their partnership angle," Schmidt says.