Saturday, December 20, 2008

Twitpay Promises a Simpler Way to Pay

A new payment service just getting started on the Twitter message service is Twitpay, which uses text messages to send money from one person to another. It’s not really meant for online purchases, but for more casual exchanges of money. At least for now, Twitpay doesn’t have a way for you to take money out, though you can spend it at Amazon, and you may be able to give it to charity. And payments through Twitpay can be seen by the whole world, which isn’t typically the way businesses like to operate.

Nevertheless, the limitations of Twitpay let it operate with a low cost structure that more traditional forms of payment, such as credit card gateways, won’t be able to duplicate. Twitpay will charge 5¢ per payment, which is noticeably less than the typical credit card fee around 27¢ for a $1 payment. So far, just a few users have been experimenting with Twitpay, and it’s not clear whether any actual money is involved. But at the rate things evolve on the Internet, by New Year’s Day, people may have figured out what Twitpay is good for.