San Francisco based TrialPay will announce a $12.7 million second round of financing tomorrow, which brings them to $15.8 million raised in total. They tapped European money for the round, bringing in London based Atomico, as well as previous investors Index Ventures, Baseline Ventures and Battery Ventures.
The service provides users with an alternative payment method at 3,000 or so participating merchants. Instead of directly, users are offered something for free (such as free calling minutes on Skype) in return for buying a magazine subscription. Another example – “If a customer isn’t quite sold on a software title, he or she could get that software for free by sending flowers from FTD.com, signing up for Blockbuster Total Access or buying $50 worth of clothes at Gap.com. TrialPay pays for the software using revenue (CPA) from the advertiser, and the customer gets a free license.”
We first covered them at launch in October 2007. Buyers are presented with the alternative options at the time of checkout, so they can choose to just pay as normal or take one of the offers. It’s an easy option for merchants to accept, since they get paid anyway. The question is, will consumers use it enough to make a real business out of it? I’m doubtful, but that’s mostly because we’ve seen a trail of dead bodies who’ve tried to create alternative payment schemes. People seem to like their credit cards just fine, and can smell a marketing gimmick a mile away.
TrialPay says they’re adding 15,000 new registered users per day, though, with 5.2 million total. Maybe people aren’t so good at smelling those gimmicks after all.