Chirpify, which handles payments over social media, is launching a direct payment processing option, overcoming its reliance on PayPals service.
By adding this new option, Chirpify has reduced the fees it charges to merchants. Previously, merchants paid Chirpifys 2.9% plus 30 cents per transaction on top of PayPals 2.75% plus 30 cents per transaction. Chirpify has been working with PayPal for more than a year.
This effectively cuts the transaction percentage in half, says Chris Teso, founder and CEO of Chirpify. Merchants and consumers had been requesting Chirpify change payment processors, Teso says. Chirpify now works with a large acquiring bank, which Teso would not name.
Chirpify enables in-stream payments on Facebook, Twitter and Instagram. To purchase an advertised item on the social networking sites, users reply to a tweet or comment on a post with the word "buy."
Through Chirpify's direct processing, merchants can accept credit, debit and direct automated clearing house payments.
While Chirpify has seen some success with social commerce, many other companies have hit roadblocks in developing social payment functions. Companies such as Twippr and TwitPay scrapped their attempts at building a payment network on Twitter. And in April, Twitter abruptly shut down a product from Ribbon, which allowed people to buy without leaving the social networking site, and from Flattr, a Swedish micropayments company.
Weve seen past failures and companies that talk about doing social commerce, but we dug a stake in the ground, Teso says. Everyone else is doing advertisement; we actually enable purchase and payment as just part of the conversation.
Other companies post links that redirect users onto full e-commerce sites and conversion on advertising is low, Teso says. Allowing transactions to take place within the dialogue of a post makes Chirpify truly seamless, he says.
Chirpifys move to offer direct processing is a sign of the social payment company's maturation, says Arkady Fridman, senior analyst at the Aite Group.
A lot of these digital channel startups that arent directly competing with PayPal at the start, use PayPal in the beginning, Fridman says. Essentially they have built up some volume and caught the early adopters which were likely PayPal account holders but when [Chirpify] gets more mainstream theyll need other methods.
As Chirpify expands, its customers will demand better rates and a clearer fee structure, he says.
The new payment option could lead to other possibilities for Chirpifys product and service set, Teso says.
"The payments expansion will open up other business cases for many merchants and brands," Teso says. "It expands the opportunities Chirpify has in real-time commerce across the entire social Web and beyond."
The company is actively looking for ways to expand, he says.