A new service built on top of Twitter by a third party, Twitpay is interesting both in its own right and as an example of the way the Twitter ecosystem continues to grow. You may remember a number of attempts to launch micropayment services a few years back – none of which ever got much traction. Well, Twitpay layers a micropayment service on top of Twitter.
Here’s how it works: if you want to send someone money, you format a tweet using the “twitpay” keyword, as in “@mikeg1 twitpay $1 for useful writing” (that’s just an example; you shouldn’t actually be testing by sending me the odd dollar). Twitpay monitors the public tweetstream for these messages, and tracks who owes who money. When you start sending money to people, you go over to the Twitpay site and fund your account via paypal. When you’re owed $10 or more, you can take it out in Amazon gift cards or charity payments.
Twitpay proposes to make its money by taking a 5 cent fee for every Twitpay over 99 cents. It’s an interesting idea, but it makes me wonder: what’s to prevent Twitter from just adding this as a core feature of their own? 5 cents a pop surely wouldn’t pay for Twitter entirely, but as they’ve steadfastly refused to release any details on their monetization model, why not start with micropayments? In the meanwhile, though, Twitpay occupies a useful niche, and the ease of sending money this way might make them succeed where their micropayment predecessors have failed.