Micro-Blogging Meets Micro-Payments, Courtesy Of Tipjoy's API

Social micro-payments enabler Tipjoy is releasing an API today that allows charities but also companies and individuals to handle relatively small payments from within their applications and spread the word through Twitter. This opens up a lot of opportunities for application developers who might benefit from small transactions, from e-commerce services selling content, subscriptions, etc. to charitable causes and non-profits accepting small donations online to peer-to-peer payments between individuals.

Inserting payments made through Tipjoy into your Twitter stream can be an invaluable way to spread the message about what it is you’re buying or donating to, much like sharing your activities, digital media you like and applications you use can spread virally through social networking sites like Facebook. With the Twitter Payments API, developers now have an easy way to integrate payment handling into third-party Twitter applications and potentially benefit from the network effect for all the people who use their service.

Making a payment involves posting a tweet under these formatting rules, e.g. ‘p $2 @robinwauters’ (thanks!). After posting, Tipjoy will record the transaction by using the Twitter search & REST APIs. Note that this is an asynchronous process, not immediate, although real-time transactions are also possible. For more information about how it works along with some examples, go here.

For now, this only works directly through Tipjoy accounts and PayPal, although the company is working on additional support for credit cards and checking accounts. Also worth noting is that transactions are currently only available in USD although other currencies are said to be on the way.

In any case, it’s a far more robust solution for micro-payments through Twitter than its competitor Tipit, which merely uses Twitter as a sort of relay between PayPayl account holders and the person or company on the receiving end.

The company, which was originally seed-funded by Y Combinator and went on to raise $1 million in Series A financing in September 2008, is currently running a contest for developers who use the API for their application, and is giving away some free schwag and one Macbook Air for the winner. Check it out here.

The startup will be posting ideas for applications on this blog and their own Twitter account, but we’d be happy to learn what you can come up with, too.