Ask HN: Review my micropayments startup, RubyPay
24 comments
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.
Even if it's these elusive "points"?
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.
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.
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.
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.
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...
Oh, wait, that was wallet systems after all...
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.
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.
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.
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.
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.
Points bought and redeemable for cash that you can use to pay people are money, period.
+ 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
- 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
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.
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.
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...
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...
Thanks for everyone's feedback. I've closed the service.
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.
Thanks for the suggestion, for now if you'd like to see what a paid link looks like: https://www.rubypay.com/i/9c7wfUo4ACZ
clickable: https://www.rubypay.com
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.
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.
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.
> 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.
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
https://www.rubypay.com/pages/demo
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.
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.
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.
https://www.rubypay.com