Paypal Competition: Greenzap

[Erwin]

Hey, if it's free money go for it. To be honest though, I can't see how they can keep on giving away free money. If 100,000 people sign up, the company has to give away half a million bucks!

[amykhar]

I am very wary of this site and would be reluctant to give them any of my financial info. The little warez-type spellings don't fill me with confidence.

[Chris M]

I haven't given them any of my financial data yet - And if I was going to, I'd give them info to my other bank account, which has about 5p in it

Satan

[T3MEDIA]

Originally Posted by Rein Masamuri

This community has gotten so hostile, it's no wonder I dont' come here any more. It's become an ego-stroking jerk-fest for "Elite Coders":tired: .

Let us not speak of illegal hackers. If you speak of it they threaten you! Gota love it. But there are some good people around the ass holes here.

[libertate]

What I ment by momentum is not advertising and big name groups.

I am talking members. Although it seems that we here are almost all signed up for it. But we are a very special niche group. We specialize in online activites one way or an other. More importantly, many of us are heavily involved in financial transactions online - therefore it is in our interest to monitor companies like Greenzap.

I referred to momentum of going out to the corner grocery store and asking 100 people what is greenzap, then asking what is paypal? What do you think the public knowledge would be for each?

I am very leary of any company that "gives away" money. I worked in the venture capital industry right around the dot com boom and bust. The road to destruction was littered with companies who gave away stuff because they thought "people will come".

Greenzap's marketing strategy is based on word of mouth. "...GreenZap expects their community to spread the word...", and "Fortune 500 companies spend hundreds of dollars in an effort to acquire a single customer"

The problem is in their business structure is that Fortune 500 companies spend hundreds of dollars to get thousands or millions of dollars back from a single customer. This is not the case with greeenzap - "GreenZap Gold Account holders are only charged a flat fee of just $1 per online transaction".

So, in a nutshell, greenzaps method of creating brand recognition, and customer momentum is by word of mouth, and giving away money.

They income structure is volume. $1 per transaction. So for each new potential customer they have to make at least 5 to 30 transactions.

Start to see the problem? When you signed up and GOT the reward, you did not yet become a full customer. You will be as soon as you made your first transaction, but what are the chances that each and every individual who signs up will also make transactions, at least sufficient amount to cover the cost of aquisition.
(Ex. from an other web site "new site being launched called GreenZap. What's it for? Doesn't matter. When you sign up you get $25 to spend on eBay.")

Some other problems - there is no mention of ATM/eCheck/Credit card/Bank account services features, connectivity, transaction methods, et al.

This is a crucial part of any financial service, be it a bank or intermediary like PayPal. I am not confident they have their technical or even service structure in place. They better start cracking because according to their online documents, they are going live summer 2005!

I wish them the best, but if I was back in with the VCs, I would scream and run the other direction.

Originally Posted by zajako

when they originaly opened their server got hit with so many hits it crashed. They had to get many more servers right off the bat, thats a lot of momentum!!

Or it could mean that they are ill prepared for the task they set out to do.

Originally Posted by Rein Masamuri

Its also backed by quite a few major banks such as Citibank. (There's your money)

I would love to agree with you there is the money but unfortunatelly that is not the case. Huge banks invest money in almost everything. Huge banks won't tell if the La Jolla, California CitiBank branch investment manager put in $100 or the corporate HQ dropped $10million. you won't know it until their first filling, which won't happen unless they go public.

Originally Posted by Rein Masamuri

Even eBay signed up for it, and they OWN paypal O.o (There's your momentum )

How does "eBay" sign up for Greenzap? There is no corporate signup structure defined anywhere on any information from Greenzap. I grant you that several well known "eBay"-ers signed up for it.

Here is an other interesting historical reference. Remember the Whig Party of the 1800s? They were AGAINST something. Not FOR. Guess what happened when the things that they were against shifted direction...

PayPal simply needs to make the changes to recoup the lost customer faith, and greenzap (if it is legit) is gone. This is where the existing momentum comes in.

[twoseven]

but if the $1 per transaction is < paypals cost per transaction they could make their mark in the payment transfer realm

[zajako]

Originally Posted by Erwin

Hey, if it's free money go for it. To be honest though, I can't see how they can keep on giving away free money. If 100,000 people sign up, the company has to give away half a million bucks!

well, if you had 25 dollars in your account just for signing up, you have to spend it somehow, when you spend it, regardless if you ever see it someone pays a transaction cost. Its almost always the company or person receiving it. So no matter way they get some of their money back.

Its not a bad way to get people to start signing up really.

[Erwin]

I remember Paypal used to do the same thing.

[Zachery]

Originally Posted by Erwin

I remember Paypal used to do the same thing.

I love the way the bash on paypal, there are other online proivders that act like paypal...

I cannot believe for a moment any LARGE portion of the paypal users (10%+) are actually having problems. Considering I've been using paypal for 3 years now with no problems.

[zajako]

1 dollar per transaction ownz on paypal. This will save me a lot of money, and make things easier. I cant wait till release. THey also are not as strict about getting a credit card for your account to use off line too.

They definately have the potential to take on paypal.