There's a rumor that the majority of first posts from newbies on Twitter goes something like "Just trying to work out what Twitter is for!" It's undoubtedly a successful invention, yet sometimes it feels like a solution in need of a problem. A company called TipJoy, though, thinks it's got a great future as a vehicle for micro-payments.
TipJoy, that already manages online micro-payments, is today launching an API that'll let companies incorporate a portal to the TipJoy small-sum payment system in their web pages, or alternately simply exchange cash between individuals, and it's all connected up via Twitter.
The idea is that you can send a Tweet to your intended recipient with an embedded trigger text that sets off a payment--simple, fast and efficient since it works in near real-time. TipJoy does all the behind-the-scenes transaction between you and the target, which is why it only works for people with TipJoy and PayPal accounts for now--later it plans to add proper credit card and checking account transactions. Straight away it looks like a sensible marriage of two simple technologies: a sub-140 character text command typed into a social networking tool you use sporadically throughout the day would seem like an obviously convenient way to swiftly pay back the $5 you borrowed from Brian at lunchtime when you fell short at the coffee shop. Companies could also use the system as a way of collecting cash from users--perhaps a subscription to an online magazine, easily paid off with a Tweet.
But actually the TipJoy tool reveals a particularly powerful way to exploit the social networking side of Twitter. Imagine a charity that uses Twitter and TipJoy as a campaign vehicle: When you Tweet to pay money to it, you're effectively announcing that fact to all your followers. That has the immediate effect of promoting the charity's cause, attracting visitors to their website, and introduces the potential for a viral-like spread of donations to the charity as members in your follow group then make their own payments, spreading the message through their Twitter feed. It also brings convenience and speed to the charity-giving process, since you can do it from the comfort of your desk or cellphone at a moments notice.
One interesting aspect of this news is that with its API, TipJoy's obviously grasped the potential of Twitter as a vehicle for expanding its business, and enabling other businesses to garner revenue...all while Twitter is all of a fluster trying to work out how to monetize itself.
Related: The Week That Twitter Tipped