PayTap, a shared social bill-payment platform, launched today at TechCrunch Disrupt SF. Users can chip in to co-pay bills online and use social features to aggregate financial resources from friends and family for a flat $1 fee per transaction.
The company aims to reduce the cost of transferring money, take advantage of existing social networks to help users communicate, and allow users to track who has paid which portions of bills. Users can pay using credit, debit PayPal or bank transfer, and PayTap sends the money directly to the biller.
Co-founder Sean-Michael Daley says he originally thought of the idea when he and his brother were trying to coordinate paying for their mother's hospital bills. He and his team have been working on the concept for three years now; Daley says the bulk of that time was spent on research and dealing with regulatory and legal processes.
Daley highlighted the company's first merchant integration with Amazon during his presentation, showing how people can pick a big item (usually gifts) on Amazon, use Facebook to alert their friends who are chipping in, and each contribute their amount on PayTap.
He describes the company's vision as solving multiple problems with current payment methods, explaining that cash and checks aren't always used the way they are intended and lack visibility; money transfers are "expensive, time consuming and difficult"; and banks are slow and lack a social component.
In the presentation, Daley used paying for his daughter's bill at college as an example. He highlighted the relatively frictionless process, as PayTap allows you to choose the payment method and doesn't require you to sign up.
PayTap raised a $500,000 seed round in April 2012 from Precept Capital Management and Sandor Capital; it previously closed a $20,000 angel investment in August 2011 from Tech Wildcatters.
Daley says they arrived at the $1 flat fee to reduce uncertain costs that users face when sending money through Western Union or Moneygram.
Daley says the company is working with billers to offer PayTap as an alternative payment method, as well as using advertising and partnerships with companies like ORCC, PreCash, DWOLLA, and Akimbo Card to attract new users.
The company's next step is to enable users to pay bills or receive payments from other countries, as it is currently only available in the U.S. After that, Daley said he hopes to broaden the service to let people charitably pay bills for people they don't know.
While the payments space is extremely crowded right now, PayTap has done a great job of identifying a space to fill in the market. The product already looks to be quite successful, but I am most excited about their potential in the charitable world.
The company's website and Facebook app is now live. Daley says they will release iOS and Android apps in about two weeks.
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Q: How big is the fee?
A: It's a flat dollar fee, so it's infinitely cheaper than a lot of other methods of sending money.
Q: What's the incentive for a merchant to put this on their checkout?
A: They get paid. I mean for a lot of people, particularly billers, they're sitting there with a lot of people in bad debts. They're able to encourage people to actually pay on time, because they're getting their family and friends to come in and facilitate that payment.
Q: Do you have any users or actual traction?
A: We're actually launching here at TechCrunch [Disrupt] so the service will be up and running and people can use it.
Q: Can you give me an example of a biller who you think would put this on their website?
A: AT&T for example. One of the largest groups outside what I described as financial support is people paying other people's phone bills…we make this much easier for people to facilitate that transaction as opposed to, "can you give me your account number?"
Q: So you think this will be on AT&T's website?
A: Absolutely.
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