They have a new, eBay-like take on micro-financing. You earn about 5% on your loan, while knowing 50% of loans will fail.
I like their concept and plan to throw a couple hundred into the wind and see what happens.
I was hoping to really lower the barrier to donating by only asking for a .10 - .20 cent donation per person, per month. I think many more people would be willing to donate .10 - .20 cents per month instead of $6.00 per month.
.10 - .20 cents a month would not be a noticeable difference to most people, so people would sign up without any concern about their own finances. As long as they could trust the payment options and donation service.
Lets take a look at a possible scenario here. Currently amazon micropayments charges credit cards 5% of transaction value + $0.05 for transactions anywhere between $.05 - $9.99.
Lets consider single transactions between .10 - .20 cents. Any transaction in this range comes with a 6 cent transaction fee. So you would receive a net payment of .04 - .14 cents per person per month.
Imagine an example where each person donates .20 cents and we receive .14 cents net per person after transaction fee. How many user do we need to get $500,000? About 3.57 million users.
Seems like a lot of people but it is only about .01% of the United States population. And since the website could take donations from anyone in the world willing to give .20 cents a month, I think attaining practical large sums would be achievable. And extremely affordable!
So .25 cents a day is good if you can afford it, but .20 cents a month is soo extremely affordable for most people and with scale it could add up to a lot!