FairTransferOfPennies

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From PennyBank.Biz Discussion

Fridemar, I'm all for transparent transactions - keeps the trust level high - but again I don't see your solution to the 5 cent problem. Without it, folks that have very little money can't contribute. Maybe something like this:

Transfer via a Local Deep Pockets Mediator

Assume there is one that lives in a local area that has deeper pockets and established back account. Those living close by this person, with only 5 cents, give him their cash. Thus a local club might exist, perhaps they meet once each week with this person, and tell him how they want their five cents spent (or they have already made this instruction online). This deep pocket person now has a bigger amount of cash collected, and uses that to charge the account - thus only one transaction rather than very many for each person having 5 cents. In other words in the brick and mortar world the tiny amount has a local collection mechanism prior to charging the virtual account. The brick and mortar mechanism should be standardized so all do the same, and so it can be publicized at large scales – so the 5 cent people know where to go to physically deposit their five cents.

Transfer via a Nonprofit Wiki Credit Union

Hopefully somebody else has a better idea than the above. The better idea would by-pass today’s banking/credit card infrastructure so community members no longer have to pay any transaction fees to entities outside the community. In such regard why not consider a nonprofit Wiki Credit union. Existing laws allow one to start a credit union – which is nothing more than a nonprofit cooperative where people pool their money to loan to members. The trick is figuring out how to leverage this to gain free or very low cost online transactions. For example you go to the new community owned credit union in your local area to deposit your 5 cents. Then you go home and sit at your PC to direct this 5 cents to your desired virtual project pot. This new entity could also have local kiosks to deposit the 5 cents, to avoid a large building overhead. -- MartinPfahler

Transfer via a personal email-based Paypal Transfer

Martin, we both and probably a lot of other peers are searching the Web for an appropriate lossless transfer provider. To save double work, I opened a WikiTrail for collaborative search and annotation.

Paypal Fees is my first WikiTrailMark for our discussion:

For the convenience of our readers, who don't use the TrailFire addon of FireFox, here is a copy of the SocialAnnotion, inviting Co-Searchers:

Hi Martin,

on this Paypal Page, you can see, that money transfers from Personal Account to Personal Account are free for the sender and free for the receiver.

Also free is: 

   * Open an Account
   * Add Funds
   * Withdraw Funds

Fridemar working for a SocialCommonWealth

So poor peers can pool their pennies on their Personal Accounts, once they have a Personal Account.


Did you know this? If there is some fly in the ointment, let's find it or continue our search. Independently we need a public tracking service.

-- fridemar


Fridemar, this is interesting about the free PayPal account. Note that some time back eBay bought PayPal. eBay and PayPal are all about making money on money transactions – or they would be out of business.

The last time I studied about “electronic currency” transfer mechanisms, meaning the underlying structure that allows banks and other financial institutions to transfer money, there were just a few big players that owned this space and made money on the transfers, and in effect everybody else, including banks, having to pay them when electronic transfers are made.

Thus without yet understanding the dynamics behind the PayPal account you mention I suspect that in some way a person with 5 cents wanting to move it around “on-line” is still going to in one way or another get socked with a transaction fee that wipes out the value of this 5 cents.

I also suspect that if one moves money from their bank account to this PayPal account it would also incure a transaction fee. Without yet researching this PayPal issue I suspect the PayPal account you mention above is like charging an internal account of a micro currency system (I know how the micro currency system works), and again it costs a transaction fee to do so. Once this account is charged up, one can move their money around for free. In fact Brandon Sanders said setting up this kind of system, to move money around once an account is charged up, for free, is a rather easy project for software folks – but again that is not the real problem – it is getting the 5 cents from the physical world into the virtual account in the first place, without incurring the transaction fee.

I am hoping that others reading this might know more about the PayPal account you mention and clarify the dynamics. If not after some time for other to read and contribute, I can find and talk to a relevant insider at PayPal, to get the straight answer.

Imagine that this PayPal mode was the “loop hole” that we needed, so one with only 5 cents could contribute without loss of value. Seems to me the word would quickly spread like wildfire, because lots of folks don’t like this existing burden, and would then take advantage of this loop hole in the process. PayPal executives would then see millions of folks doing this, and the drain on their revenue stream, and I suspect plug this leak quickly, so that it was no longer free. MartinPfahler


Why a Free Penny Transfer Service is attractive for the Money Service Provider

Martin, it is clear, that a lossless penny-transfer attracts millions, but it is highly attractive for Money Service Providers too, because of the following ReasonsForAFreePennyTransferService:

I wrote Money Service Provider, because even Paypal started as such an enterprise, without having bank status, as far as I know.

Pinpointing the LosslessPennyTransferSystem

Fridemar, I don’t argue against any of your mentioned upsides for money service providers. But the problem, as I see it, still remains, whether for money service providers or the general populace wanting such no loss system, I still don’t see its existence.

Martin, if I understand you right, you still don't see the existence of a LosslessPennyTransferSystem established, although PayPal has it, due to their not yet verified fee-table on this Paypal Page.

Let’s assume that PayPal figured out how to do the transactions with no typically high transaction costs so the value of less than 90 cents is mostly maintained. If you had this capability what would you do with it?

Martin, I would do it for both, the sake of the service-provider and the sake of the planet as sketched in ReasonsForAFreePennyTransferService.

They are a business and have decided to profit from it, by charging transaction fees. Seems to me it would then require a new entity to in effect copy this capability and donate it to the commons, so there is no profit motive, and the commons can use.

Martin, if they are only a narrow-minded "business", being fixed to short-time profit, then they are vulnerable by a more broad-minded competition ("YouTube-effect"). Otherwise or additionally a Non-Profit Organization is perhaps the more sustainable solution.

In such regard I am still not convinced that PayPal has figured out this low cost mode of electronic transfer, and in fact doubt it.

The leaders in low cost transactions technologies do not include PayPal, rather it is companies working in the micro currency space (some time back an MIT professor spun off such company) – and as far as I know none of these micro currency companies are donating their technologies to any commons.

I suppose the leaders of micro currency are fixed on securing protection mechanism and this is costly. If the Commons build a transfer system, based on transparency, than is a real alternative. Can you point to some links to these leaders? Perhaps the competitors in the second row could get a cutting edge with a TransparentTransferSystem.

And even then all of these existing micro currency systems do not really solve the 5 cent problem I have mentioned, because still one has to charge up an internal account, and that incurs the typical high transaction cost, and also a bank account (lots of people that could contribute 5 cents don’t have bank accounts – like a 14 year old person where a particular cause motivates them).

In- and out-transfers into a personal account of Paypal from/to a banking accounts is free (Paypal). Since Paypal has bank status now, this is a highly interesting construction, to be researched further. Martin, please discuss this with the Paypal insiders, you will meet in some days.

Also Fridemar, from what I have noticed so far, it is only you and I off in a corner brainstorming this issue, and my hunch is that so few minds addressing this issue won’t be cracking this difficult nut. Here the typical problem is how to gain more issue exposure and brainstorming participation, to increase the chances of gaining the solution? (see a related post I made at the dailybuzz section, Saturday, at aboutus)MartinPfahler

Yes, Martin we are going to amplify our buzz to attract more and more collaborators. What about free circulating songs like:

"Don't steal the Pennies of the Children?" and similar campaigns?

fridemar 08:01, 23 July 2007 (PDT) , posting mirrored and enhanced in the [SocialCommonWealth] blog. PS.: Martin do you have a blog or know peers who would like to make blog connections?


Martin's Penny Transfer Test

Fridemar, I don't have any inside contacts at PayPal and I have never used PayPal myself. With the PayPal account you mention how difficult would it be for you to set up two virtual PayPal accounts, and then try to transfer 10 cents from your bank account into one of these virtual accounts, then take the 10 cents back out and put into your bank account, and then take this 10 cents and again transfer into the second virtual PayPal account. Then one might have data to answer questions such as how much of the 10 cents value was lost in the process, and how long did this transfer from one virtual account to the other take (a few seconds or minutes, or days?). Note this process still excludes lots of people that don't have back accounts, but do have 10 cents in their pocket they could contribute.

Also in terms of generating Internet "buzz" so it is not just you and I in the corner trying to figure out how to crack this nut, rather many, I am definitely the wrong person to contribute in this area of "generating Internet buzz to gain more awareness and participation from the masses". If you know how, great! - I will watch your execution process and learn. MartinPfahler

Martin, currently I have a Premium Account at Paypal. Your suggested test can only be made by peers, who have a Personal Account. If I understood the agreement right, it would cost me at least 20 US$ to install a second Personal Account in addition to the Premium Account, because the Paypal terms of service allow only then a second personal account, when there is a unique credit card and a unique bank account, associated with it. So I ask the readers of our conversation, to take part test it (if you have not already done it) and write on your experience.

fridemar 16:59, 24 July 2007 (PDT)


IncomePilotProject

Fridemar, please see the DailyBuzz for Monday, I'm trying to gain your participation in this effort IncomePilotProject, I hope it has relevance to your areas of interest.MartinPfahler

Martin, you have won my full sympathy and participation. Today I have concentrated myself on composing and arranging the Quicktime Movie "Blueberry Boogie All you can eat". It is part of my warming up for collaboration with musiceans and artists of the Commons. We must develop a strategy, that each peer gets "enough food on the table".

fridemar 08:01, 23 July 2007 (PDT), posting mirrored and enhanced in the SocialCommonWealth.Com blog.

fridemar 06:15, 21 July 2007 (PDT) , blogging for a SocialCommonWealth

Transfer via a Bank's internal Account to Account Transfer

must find such a bank, perhaps in connection with special PR actions



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