Tip5 is an interesting concept that has the potential to be a great service. It allows musicians performing on the street to set up an account and take mobile donations from folks who want to tip but don't have change or don't want to give cash. Unfortunately Tip5 does not provide adequate information on their site about their identity which undermines that sense of comfort one needs when using a financial service.
"You register, choose your short id and print out a poster to display."
"During a performance,
Your fans text your "short id" to our phone number.
We send a reply with your thanks and a link where the tip amount can be confirmed and charged to a credit card, PayPal or Amazon account.
We redirect the collected tips to your PayPal account."
Tip5 takes a 10% transaction fee and provide online reporting tools.
Given the increasing ubiquity of mobile devices, Tip5 is the kind of service that street musicians are going to need as we move closer to a cashless society. Though I doubt cash is going away, the long term trend is towards less cash, more plastic plus increasing use of mobile payments.
I contacted Tip5 by email and was told that the founders started the service because they typically don't carry cash and have moved on from enjoyable street performances because they felt uncomfortable sticking around without donating.
They considered creating a service based on text messaging, which is how many nonprofits receive mobile donations, but found the fees too high. So they went with a solution that can accept PayPal, Amazon or credit card payments.
But here's the largest initial hurdle that I see for Tip5. Beyond an email and phone number there is no identifying information on the site. As I've discussed at other times, any web-based service that's focused on financial services has an even greater obligation to be transparent and that includes identifying who's behind the service.
When I wrote their support email I asked about their identity. I received a prompt reply from "Sirma & Stilian" with an invitation to meet if I was in the Bay Area. Though I could not take them up on their offer I did find that their Tip5, LLC, which they mentioned in the email, is indeed operative in California (pick "Limited Liability Company/Limited Partnership Name" and then search for "Tip5").
I'm not trying to say there's anything shady going on but the lack of information on the site is, at the very least, a business mistake. Given the number of small business people I know that have been screwed over by PayPal and had payments frozen for half-assed reasons, I know that the proof of a service is in what they actually end up doing. Nevertheless, Tip5 should at least be listing their LLC and identifying their location.
That said, the Tip5 concept is an excellent idea for street musicians. If you're looking for such a solution, I would suggest checking them out but also taking a closer look at PayPal and seeing if their payment options would suffice as part of a DIY solution.
(Photo via DrGaia.)
Hypebot Senior Contributor Clyde Smith (@fluxresearch) blogs about business at Flux Research: Business Changes and about dance at All World Dance: News. To suggest topics for Hypebot, contact: clyde(at)fluxresearch(dot)com.