Kwedit, a pseudo-credit based monetization system that launched only 3 months ago, is seeing growth in its repayments. Their goal to enable honest people to purchase digital content online without the need of credit/debit cards is achieving fruition. One of their core features, called Kwedit Promise, allows users to buy virtual currency with a promise to pay it back later at a local 7-11 or by mailing in cash. With over 100 publishers on board, we expect that number to double in the near future. Read more after the jump.
The company measures the health of its Promise product by taking the total value of the due repayments and dividing by Promises made. The resulting fraction is over 33%, meaning that over one-third of Promises have been repaid, a small rise from the statistic TechCrunch reported on March 12.
The incremental growth of Promise repayment can be attributed to, well, the honesty inside of us. The system deters faulty behavior by blocking those who fail to repay. The company stated on their blog post that, “only those who repay can make increasingly large Promises. Over time, larger Promises by honest actors overwhelm the smaller Promises that are not repaid.” This is a very interesting pattern and indicates a correlation between bigger Promises and higher repayment rates.
Users usually have 2 weeks to pay back but 22% repay on the first day and 66% within the first week. The rest linger on, but “getting paid even 3 months after is better than nothing,” asserted Danny Shader during Social Gaming Summit 2010. Their other service, Kwedit Direct, is a product designed to enable users to purchase from any eCommerce site that is signed up by printing a barcode and paying at a convenience store. It’d be great to see how Kwedit Direct is doing and which sites have adopted it.
I agree with Michael Arrington of TechCrunch that the company’s brilliance lies in its unreliability. Despite cynicism you might hear from critics, Kwedit Promise’s rise is backed up with 3 months of data. By empowering 1 in 4 people who lack credit/debit cards, Kwedit Promise seems to be something publishers should add to their monetization arsenal to increase their conversion rates roughly 5-10%.