Mobile payment is threatening to overtake social messaging as the fiercest digital land grab, with dozens of companies large and small desperate to help you use your smartphone to send or spend your money with a tap or swipe.
The mobile-money app Tilt has distinguished itself from the buzzing swarm of consumer-payment and peer-to-peer money-transfer services by placing social circles at its core.
In the attached video, Tilt founder and CEO James Beshara describes his three-year-old app as “the easiest way to collect money from a group of friends for free” and as “crowdfunding for groups of friends.”
On the platform, anyone can set a target amount of money to be raised, for a specified purpose, from an invited group. Once the preset amount is reached, or “tilts,” each contributor is charged.
Beshara says the fastest growth in Tilt usage is happening on college campuses, where tight or loose groups of peers are frequently pooling their cash for events or outings: “the fraternity party on Friday night, a philanthropic event on Saturday, a tailgate for the big game.” Month-over-month usage growth on campuses exceeded 50% at last count. The company even ranks the biggest party schools based on money pooled for campus bashes.
Yet the platform is adaptable for any group or community, such as charity fundraising drives or parent groups at school that collect money for supplies or field trips.
Since launch in early 2012, more than 300,000 “campaigns” have been initiated, and the company claims it is launching more new ones per month than any other crowdfunding platform.
(The more familiar application of the crowdfunding concept, of course, is for new businesses or projects, which tend to be larger than the typical three- and four-figure funding goals on Tilt.)
It costs nothing to pool and collect money like this. The way Tilt earns revenue is by charging a 2.5% fee to anyone who sells things on the platform. Celebrities such as Conan O’Brien and the rapper Ice Cube use Tilt to retail their merchandise to fans, and college organizations commonly sell T-shirts and such.
Tilt itself received some $37 million in funding from pedigreed entrepreneurs and venture capitalists, including: Andreessen Horowitz, SV Angel, DCM, Sean Parker, Alexis Ohanian, Matt Mullenweg and Elad Gil.
Mobile-payment market set for rapid expansion
The launch of Apple Inc.'s (AAPL) Pay service for iPhone last year made the loudest entry into this market, but the rush to participate in mobile payments is crowded and intense. Forrester Research projects the peer-to-peer mobile payments market to more than triple in volume in the next five years.
With powerful mobile devices already having revolutionized communication and on the way to transforming everyday services such as taxis, their potential to displace cash and checks is now foremost in technologists’ minds and business plans.
What’s clear is that people under 30 generally have little hesitation toward sharing their credit or bank account information across mobile apps such as Tilt, even as many dislike dealing with banks that have existed for a century.
Beshara says it comes down to convenience and peer acceptance for younger people. While Tilt has “bank-level” security protections, it’s far easier to use than banking services for the digitally attuned.
Among peer-to-peer money apps, Venmo – run by eBay Inc.’s (EBAY) soon-to-be-spun-off PayPal division – is a favorite among young people for splitting up the cost of an outing or item. Square Cash has also built scale in this area.
Beshara says such services are good for direct one-to-one transmission of money, but Tilt is the only significant player with an essentially “social layer” for groups. He also points out that the average Tilt raises 192% of its goal, or nearly double what the campaign sponsors initially sought.
“You don’t really see that kind of engagement or participation when it’s just peer-to-peer or individual payments,” says Beshara.