

Ask HN: Review my micropayments startup, RubyPay - rubypay

I just launched my new startup, and was hoping for some feedback.  It's a micropayments site based around selling digital content, with a focus on making it dead simple for sellers to set up.<p>https://www.rubypay.com
======
byoung2
_RubyPay has zero transaction fees._

I like the way you've worked around the transaction fee issue by offering
different rates for buying and redeeming. The cheapest points are $0.00769 to
buy and redeeming gets you $0.00667. So, on average, for every $57.69 coming
in (or more, if people buy in smaller amounts), you're paying out $50, plus
any interest you earn on parked balances.

------
jacquesm
Hey there, great initiative, make sure that you get approval to run a 'wallet
system' or you could find yourself in a ton of trouble. Maintaining a balance
on behalf of customers comes with a ton of responsibilities, in the EU you
would be considered a bank.

~~~
spylogic
Even if it's these elusive "points"?

~~~
byoung2
It's basically the same setup as iStockPhoto. There, you buy "credits" for
some arbitrary exchange rate that you can use to buy photos from other
members, who then exchange the points for payouts. There is a period of time
where the credits are bought and not used for purchase, and a time where they
are used but not redeemed. There are plenty of businesses who handle this
without a problem, so I doubt he'll have trouble setting it up.

~~~
jacquesm
No, that's definitely not the same. There is no potential for fraud and / or
tax evasion and / or money laundering in that situation. With a wallet system
you have those in spades.

~~~
byoung2
Actually, it's exactly the same. In both systems, I deposit my money with the
company (RubyPay or iStockPhoto) in exchange for a certain amount of
points/credits. They hold onto my money until I buy something. On iStockPhoto
I buy a few pictures, on RubyPay maybe I buy access to a premium blog post.
The points are transferred from my account to the seller's account. The seller
then redeems the points/credits for a payout by check.

Is there a difference between the two that I missed (besides the fact that
iStockphoto screens submissions)?

There are ample opportunities for fraud on both sites. For example, say I'm a
drug dealer and I need to collect illicit funds from customers. I could post a
digital image on iStockphoto and require my customers to buy it before I give
them the drugs. Or if I already had a stack of cash I needed to clean I could
set up fake accounts to buy my own images, and pay taxes on the profit.

~~~
jacquesm
That must be why VISA has explicitly forbidden stock photo bureaus from using
their cards without special permission in their merchant account contracts.

Oh, wait, that was wallet systems after all...

~~~
byoung2
So maybe both RubyPay and iStockphoto fall into the same category that is
quite different from wallet systems? A category that includes sites that use
virtual currency, but don't store your VISA credentials for future purchases.

~~~
jacquesm
RubyPay is - as far as I can see at this moment - a textbook example of a
wallet system, and iStockphoto is a typical example of a pre-pay system.

The public could not pay each other using iStockphoto points, it's stricly a
one-way street where the photographers get an automatic payment based on the
number of credits worth of stuff that got sold. They're not going to go and
re-use their credits to buy other stuff.

~~~
byoung2
_iStockphoto points, it's stricly a one-way street where the photographers get
an automatic payment based on the number of credits worth of stuff that got
sold_

That's what RubyPay describes here: <https://www.rubypay.com/pages/points>. If
I sell 7500 points worth of whatever, I get $50. The only difference between
the two is that RubyPay lets you prepay for an arbitrary service, not just
stock photography.

 _They're not going to go and re-use their credits to buy other stuff._

On iStockPhoto, you can use the credits you earn to buy other items. RubyPay
doesn't make it clear whether points you earn can be used to buy other
services or whether they have to be redeemed for a check. iStockPhoto looks
more like a wallet system than RubyPay actually.

------
dangrossman
How much time have you spent with lawyers and consultants on your verbiage,
terms and agreements with payment processors? The thing that worries me about
any new payment startup is whether they've covered all the right bases... if
they haven't, they can be out of business overnight when they realize what
they missed. It's a fine line between selling points and factoring (processing
payments on behalf of another business), where factoring is contractually
forbidden in almost every merchant account and 3rd party processor contract.

------
chrisclark1729
You should really find a way to incentivize people who want to pay to join the
site. I can't even figure out how to join as a payer, let alone a reason why I
should.

~~~
sgoraya
I agree - A 'buy RubyPoints' image/link might be desirable; and similarly to
parent comment, what is the major incentive here? What site(s) currently
offers redemption of Rubypoints?

> Thanks for the suggestion, for now if you'd like to see what a paid link
> looks like: <https://www.rubypay.com/i/9c7wfUo4ACZ>

Rather than having to sign-in to view how a transaction is done, can you have
a demo page that includes 'dummy' rubypoints that can be redeemed to view a
pdf/mp3 - for me, it would help make a decision about whether the service is
useful or not.

In general, cool idea! I'm just the type of person that would like to see the
service in action without having to login/create an account first.

~~~
rubypay
I added a demo area for you, hope it gives you a better idea of how the app
works.

<https://www.rubypay.com/pages/demo>

------
rakkhi
\+ points: Like the simplicity, if customer experience is good I would
definitely try this for my blog

\- points: Need to support more payment options e.g. Paypal and Google
checkout. No way am I putting my credit card into your application. If you are
storing these details I also hope you know you have to be PCI-DSS compliant
Small bug: edit profile to add address etc gives you an error because the
change password verification box is empty

------
unohoo
If you setup a demo site with sandboxed transactions, it will be very useful
for publishers to evaluate quickly if they'd want to use your service.

~~~
rubypay
Thanks for the suggestion, for now if you'd like to see what a paid link looks
like: <https://www.rubypay.com/i/9c7wfUo4ACZ>

------
jlogic77
It's a good idea. I like the idea that this can get around the high
transaction costs per transaction, but the points system is a little
confusing. The one line of code thing is cool and should be easy to get
publishers to try it.

------
f7u12
I could see myself using your service to charge monthly for access to a
webapp. Do you have any plans for that, so that a user has to pay only once
per month instead of each click? Apologies if that is already in place.

~~~
rubypay
Subscriptions are not available yet, but they will be in a few weeks. Just to
clarify, the user does not pay per click, but rather per link. If a user has
already paid for a link, clicking the link a second time will forward the user
to the correct content.

------
andrewtbham
what's the phrase... content drives adaption... you are going to need some
very compelling content providers to make this work.

have you considering to find a niche of content that people might pay for?
istockphoto does seem like a relevant example... there are also lots of niche
services that people pay for... like elance, 99designs, trada...

------
rubypay
Thanks for everyone's feedback. I've closed the service.

------
Concours
clickable: <https://www.rubypay.com>

