There’s so much going on that we’ve haven’t had much time to blog. We’ve got a long list of topics to blog about:
- Named Medallions (you can see them here on our blog!) which make it easy to have multiple authors/sections on a site or blog each have their own Medallion
- Lots of new press and articles about Kachingle and social payments (see the left-margin of the blog for some of the most recent)
- New widgets
- New features
- Twitter application in beta; full version rolling out shortly
- Lots of new new Sites (Medallions) participating
- New online community forum
- Upcoming online community meeting August 19
But, I decided that in any case I should try to blog once or twice a month about general stuff rather than specifics to give you all an idea of what we are thinking and doing here at Kachingle. And we hope to get some feedback from you!
What I’m going to blog about today is the focus of Kachingle, the PayPal problem we have in Germany, and the “social” power of “social payments”.
Who Kachingle is designed for
Kachingle is designed for the average user, not the technologically astute blogger. This is why we use subscriptions, manage all PayPal transactions, only allow $5 to be contributed each month, and distribute payments based on usage.
We think social payments will become ubiquitous as long as a few simple principles are followed:
- the system must be incredibly easy to use;
- the focus must be on the user rather than the producer; and,
- the initial payments must be small, e.g. $5 a month.
People need to think of kachingling as something very inexpensive, without concerns that they might be expected to give more. But because we limit the incoming money, this means the money made by producers will initially be small. Producers need to realize this and be patient while a new social norm of paying for free stuff emerges.
The PayPal problem in Germany
We believe our model is ideal for the typical internet user, yet we ran into a problem in Germany, which has become the hotspot 
for social payments.
We use PayPal as our underlying payment system provider. We worked closely with PayPal to get their pay-in and pay-out fees greatly reduced so that we can guarantee, even at $5/month, 85% of the money a user puts in is delivered from their pockets to the producers’ pockets. We felt, given that these are voluntary contributions, that users really care how much of their money is actually delivered to the producers.
The problem is that there is only ONE country in the whole world where PayPal requires a credit card number to be provided when starting a subscription (even though the credit card is NOT used if the user has money in their PayPal account). That country is Germany!* To make things worse, people generally don’t use credit cards in Germany; in the United States they are ubiquitous. We are working closely with PayPal to resolve this. Please be patient as we fix it.
(* According to PayPal this requirement for a credit card is because of German banking laws.)
The “social” part of “social payments”
We believe that the driver for social payments must be recognition of the users, and their ability to build a “social payment profile” that is transportable to social media platforms such as Twitter and Facebook. Our Twitter application is in beta testing now, and will be fully released in the next few weeks. Our Facebook application in development. It is only thru harnessing existing social networks that the full power of the Kachingle system will be revealed.
Coming this week we are releasing a new widget that shows off some of this power – the widget is called “Who’s Most Like Me Here” and displays for each individual Kachingler the top 1-3 other Kachinglers that s/he is most compatible with. Initially this widget will appear on the pages for Sites (Medallions) on Kachingle.com, but shortly afterwards it will be available for Owners to place directly on their Sites/Blogs.
TheGap will soon be publishing an article by me where I discuss the social part of “social payments”.
3 comments
I’ve had similar problems with PayPal on my sites, because PayPal does not even allow automated subscription buttons if the receiving account is in Germany! So I have to create and encrypt them myself.
I didn’t know about the credit card requirement, I thought this was only the case if the PayPal account did not have sufficient funds.
The “problem” with the banking system is that if PayPal takes money from a German bank account by direct debit *without permission*, the account owner can recover the money within 6 weeks just by telling the bank to take the money back again from PayPal’s bank account.
If this get’s misused, or someone forgets that they authorised the debit, then it makes work for PayPal to prove otherwise and they also have to pay bank charges for the privilege. I suspect this is why they prefer the credit card option.
But as you said, many people in Germany don’t have one. On the other hand, those who are wary of credit cards don’t usually like signing up for PayPal either!
The paypal problem really IS an issue: I just had a hard time explaining crowdfunding, paypal and the necessity of using a credit card to a middle-aged friend of mine, far from being a digital native. Finally I convinced her to join both Kachingle and PayPal, and however grudgingly she punched in the credit card data. (Can I have an extra grand iced latte for that, by the way
But seriously, there really should be a workaround for this problem! Unfortunately, the paypal people have a history of slowing down innovation. A few months ago German audiobook publisher Argon tried to make a creative commons-version of Cory Doctorows novel “Little Brother”, using the street perfomer protocol. They used a donation-widget made by sellyourrights.com, based on – well, paypal & credit cards. Argon needed 9000 euros, but in the end they only got one fifth of that. Adding to the general credit card-problem was the lack of time for collecting the money (that is to say: in-advance credit card authorisations) – paypal would only allow for three weeks…
Hi Ansgar,
Yes, we agree, the PayPal requirement for a credit card for subscriptions in Germany only is a BIG problem. We are testing a workaround and at the same time cajoling PayPal into fixing this. Stay tuned…it will get better.
Cynthia
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