Flattr Combines with Twitter to Create Social-Micropayment System in Sweden

Those active in social media can now give small amounts of money to the people they may follow on Twitter. Flattr, a Swedish service enabling micropayments or social donations online, has teamed up with Twitter to process the payments via the usernames synonymous with the social media website.

In May, Flattr revealed plans to update its system by adding a feature that will allow users to send money via their Twitter handle. Under the previous system, payments could only be sent to people or companies that were already signed up for Flattr. With the new addition to the service, if a user wants to pay someone on Twitter who isn’t already a Flattr member, the payment will be stored until that person becomes a member. In that scenario, the person receiving the money will be sent a Twitter message saying there is an outstanding payment waiting in the account.

Flattr was first released to the public in 2010 as a way to help people share money in small amounts. Up until now, Flattr has been used to only accept donations or receive money for shared content. The user pays a small monthly fee – a minimum of two euros a month — and that amount is divvied up to others by clicking Flattr buttons on their website, thereby “flattring” them for what they do. Each month the money donated is divided evenly by the number of buttons clicked and sent to the recipients, with Flattr taking 10 percent of the incoming fees. A user can withdraw the money by transferring it to a PayPal or Moneybookers account once the account reaches 10 euros.

It used to be that when a user wanted to show his or her support of something on Twitter, they would retweet a comment or share a link with their followers. Now with this Twitter connection, users can reward others for good content. In addition, with the advent of QR codes, users can scan and then send a micropayment to virtually any website, company or individual containing the code albeit a favourite blogger or artist. Users can donate any amount whether it be 50 cents or $10. For individual content creators, Flattr could be like a virtual tip jar connecting them directly to their online fan base.

The idea of charging tiny amounts for content in hopes that it will add up has been tried by websites like Beenz, Flooz, CyberCash and Tipjoy, but to date the micropayment concept has never taken hold on a larger scale. The combination of the personal connection that Twitter allows and an easy system of micropayments has a lot of potential, but the odds of success are still astronomically low for this site too. For Flattr to become mainstream it will require users to overcome the mental hurdle of spending both time and money sending micropayments to others. That being said, some people may be willing to use the service to pay small amounts for quality content as they use the service rather than a lump sum every month or year. Flattr also tackles the notion of per-item value by fixing the monthly cost and allowing a user to spread the donation as thinly as they desire. Users also don’t have to decide upfront if the blog post or video will be worth the fee since they are allowed to donate after they have already received the content.

But for Flattr to have any impact on the way content is consumer and produced, it would need to become massive in scale. Flattr says more than 175,000 things have been flattred almost a half million times and that it aims to reach a million participants by the end of the year. Even so, that million represents only a fraction of the billion of Internet users worldwide and when a website is targeting such small change it will need even more users and more transactions to make any sort of impact. So far, the only major success story from this online payments realm has been PayPal, but even it is designed to be more for larger purchases instead of nickels and dimes that micropayments target and its growth was spurred by its eventual acquisition by eBay Inc.

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