Chirpify Widens Its Payments Reach As It Seeks Social-Commerce Data

Chirpify, a social-media payments system that went live early last year, announced on Tuesday it is adding direct payment via cards and the automated clearing house network. Up to now, the Chirpify wallet worked exclusively with PayPal.

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The move will allow Chirpify members to pay merchants and each other on the Twitter, Facebook, and Instagram social networks with American Express, Discover, MasterCard, and Visa cards or with ACH transfers. It also propels the fledgling Portland, Ore.-based company further into the fast-growing world of social commerce, where companies are increasingly seeking ways to turn users into buyers and where purchase data has become a valuable commodity. “Sales attributes tied to a social identity, that’s a big data point,” says Chris Teso, the company’s founder and chief executive.

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For Chirpify members, those sales happen in a click in what the company calls “in-stream” transactions. If they like what a seller is promoting, members can type “Buy” in the comment box to pay for the item with the method they have loaded into their wallet. On Twitter, they reply to the seller’s post with the “Buy” instruction. Members can also use Chirpify to send donations.

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Teso won’t say how many members have signed up to use Chirpify, but does say the company is signing up new ones at the rate of 500 per day. “It’s really starting to perk up,” he says. It also boasts about 20,000 sellers, including Adidas, Puma, and Taco Bell.

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The addition of payment cards and the ACH smoothes out the flow of payments, Teso says. PayPal, he says, “enabled us to get up and running” but became a “friction point in our system” as that system added users, since payments required users to visit the PayPal site to authorize transactions. “We heard that people wanted optionality,” Teso says, referring to the additional choices. Users may still pay with PayPal if they like.

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Pricing was also a deterrent, since sellers have to pay PayPal’s fees on top of Chirpify charges. A registered payment-service provider (PSP) with an acquiring bank Teso won’t identify, Chirpify levies a fee of 2.9% plus 30 cents per transaction. Other types of transactions, such as donations or person-to-person payments, incur a rate of 5% plus 30 cents. In these P2P transactions, the recipient pays the fee.

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Todd Ablowitz, president at Centennial, Colo.-based payments consultancy Double Diamond Group who follows PSPs, says Chirpify made the right move in diversifying beyond PayPal within months of starting up. “It’s essential to make [payments] available to the widest amount of sellers with the least amount of friction,” he says. “Even relatively new types of payment like PayPal have their own friction points.”

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Chirpify isn’t the first processor to try social-media payments, nor the first to modify its payment methods. Twitpay, which was founded in Atlanta in 2008, also specialized in social-media payments, particularly on Twitter, and relied on PayPal, cards, and the ACH. It ended up being acquired a year ago by Acculynk Inc., a software developer that enables PIN-debit transactions in e-commerce. Renamed Payzur, the Twitpay service has been reborn on social media using debit-network rails.

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Meanwhile, Chirpify has attracted attention from the investment community. In April, it took in $2 million in Series A funding from Voyager Capital, an infusion that followed by 12 months a $1.3 million investment by Voyager and five individuals.

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A former advertising executive, Teso says his goal is to use in-stream payments and payments-related data to help companies and other entities that use social networks to market their products more effectively. Currently, he says, Chirpify merchants are averaging a 4% conversion rate. “What we’ve done is enable payments inside the social platform,” Teso says. “Our intent is to make advertising convert in the moment.”