Twitpay brings micropayments to Twitter

The New York Times has a nice little writeup about Twitpay, an experimental new app that lets you send payments using Twitter.

Here's the premise: Sign up, put some cash in your Twitpay account through another payment service like PayPal, and then send out a "tweet" to another Twitpay member, structured like "@josh twitpay $10 for beers." Twitpay takes a five-cent commission. Its founders are hoping that, eventually, it can be used for charity and disaster relief payments.

It's a nifty idea, though not for everyone. You don't get cash out of it, for example--Twitpay reimburses you in the form of Amazon gift rewards instead. Also, I'm not sure I always want to make it public that I'm letting @josh pay for my beer (don't want my Twitter followers thinking I'm a lush and a mooch), and Twitpay doesn't work with direct messages or friends-only Twitter accounts. You can, however, go to the Twitpay homepage and use that in lieu of a formal tweet.

According to Twitpay's FAQ page, the app was created "because Silicon Alley Insider said it was a billion dollar business (and) a billion dollar business sounded good to us." Indeed, micropayments are a hot topic in the social media world as an alternative to advertising-based models--Facebook has had a payment system in the works for what seems like a zillion years.

And, perhaps, it's something on which Twitter itself, still lacking a concrete business model, could capitalize. The company already bought Summize to power Twitter Search; having a payment system on board could sure help with those marketing promotions that are all the rage these days.

[mycbrad]

If they could have the receiver transfer the money back to paypal, this could be a viable business model. Send money to friends by cell phone FTW!

[sythara]

Its called mobile banking and already exists.

[innonate]

Silicon Alley Insider didn't say it was a billion dollar business, Nate f'in Westheimer said it was a billion dollar business.

[humanssssss]

People are not dumb. Amazon gift certificate?!? That's like telling me I need to buy from Amazon when I put my money in. No thanks!

[sythara]

People are dumber than you think. This is why gift certificates (which are like real money but with major limitations) are so popular as gifts.