Ohio-based Buyvite is launching its online group payment platform today in the U.S, after soft-launching at Austin’s SXSW Interactive festival in March. The platform allows people to collect funds from friends and family for group purchases. Unlike group payment competitors, Buyvite partners with ecommerce retailers through their API, and allows organizers to redeem funds in partner checkout carts by redeeming a unique code, or they can send collected funds to any U.S. bank account. The company’s ecommerce launch partners include ticketing platform Veritix, and other retail, travel and ticketing partners will be announced in the next few weeks.
Founder Brandy Wimberly is a big music fan, and found she was always buying concert tickets for friends, and often wouldn’t receive the money she was owed, which sparked the idea for Buyvite. “It’s a situation that a lot of people can relate to, and is applicable to group gifting, group travel, and event tickets,” Wimberly said. “We built our site to be a group payments payment option.”
After signing up, users can create a “Buyvite,” which is basically an invite that allows people to contribute to a group purchase or ticket purchase. Users fill out the Buyvite info, including what the item is, how much it costs in total, how much each person is required to contribute, and the deadline for contribution. Once created, hosts can send out the Buyvite to invitees via email, text message, or Facebook. Unlike other platforms, which give hosts a public page where anybody can come and contribute, Buyvite requires users to invite specific people to their Buyvite. Contributors can pay for their piece of the gift by credit card, and Wimberly said they’re in discussions to add PayPal and Dwolla as payment options.
After the total has been collected, hosts then generate a unique code, which can then be redeemed at the checkout on any site that integrates the Buyvite API. The code operates like a coupon code – when a user wants to purchase an item, they can redeem the code for the amount of the Buyvite by selecting Buyvite as the payment option. A contributor’s credit card isn’t charged until the code is redeemed or the money is withdrawn to the organizer’s bank account. The company charges a 3.5 percent transaction fee for all contributions (up to $10), and there is no charge to organizers.
Retailers who integrate Buyvite’s API pay a 1.8 percent affiliate fee when someone uses Buyvite as a checkout option. The company’s partner retailers will be announced in the coming weeks, and Wimberly recognizes that there is a big challenge involved with trying to become a payment option. “That is one of the challenges of our system. We are really a payment option and that’s not an easy thing to achieve but it’s also the value of the company,” she said. “Our payment API is seamless with any ecommerce checkout, and we’re working on getting partners on board.”
But operating as a payment option requires mass adoption by retailers, something Buyvite doesn’t have at launch. So for users who want the flexibility of being able to buy any item from any retailer with their collected funds, it’s extremely prohibitive, which is likely the reason they added the option to withdraw the funds to a bank account. “Adding this functionality was something we were thinking about doing all along so it made sense to add it prior to our public facing launch,” Wimberly said.
While this adds to the flexibility for consumers, it puts them in direct competition with other group purchasing sites like SimpleRegistry, with online registries at retailers, as well as basic payment options like email bank transfers and PayPal. Wimberly admits there are group payment solutions that don’t involve using a platform like Buyvite, like collecting cash via email money transfers, or on PayPal. “I wasn’t looking to pay someone else, I was looking to ‘go in on it,’” she said. “That’s what our system does, and does in a unique way.”
She believes that the company’s technology Patent Pending API is what sets them apart. “Our API allows users to collect funds and turn those contributions into a token or code that can be used as payment on any site that integrates our API,” she said. “So this gives us an advantage and here’s why, we can not only provide an ecommerce group payment option, but Buyvite can be integrated with any retail POS system as a group payment option too.”
After today’s public launch, the team will be adding iOS and Android apps, apps for shopping cart systems like Volusion and Shopify, and will create a retail POS payment option, so consumers will be able to make group purchases at physical stores for items like gift registries. While group purchases are definitely a pain point that startups and large retailers are trying to solve, Buyvite will have to face big challenges like retailer and consumer adoption in order to become an oft-used payment option.