The lifecycle of these companies is of interest to many of us oldtimers who used emoneymail, C2it, and many others. Paydivvy was part of the second generation that failed.

The company begins by implying on its website that one of the greatest of the conflicts and struggles in life is the inability for a group to divide up a common expense such as lunch or dinner that is paid by one individual. The potential customer reads this and ranks this problem as one of the least difficult problems he faces in life.

The potential customer clicks on the profiles of the Executives and discovers that each of them graduated from an impressive university a few months ago with a degree either in finance or computer science. The potential customer does not know how the company received start-up funds but suspects that a wealthy parent might somehow be involved.

The potential customer becomes intrigued when he discovers that he can rack up miles / points / cash back rewards since the company is not charging credit card fees and the potential customer becomes an actual customer. After becoming excited that lots of activity is occurring, the company discovers that it is not earning anything on the float since all of the customers withdraw the funds they have merely sent to themselves or to family members.

The company informs most of its customers that they are banned for violating the terms and services. The company discovers that they actually have almost no "honest" customers. Most of the initial start-up capital has been spent on credit card processing fees. Once the company tries to pass-through the credit card processing fees, the few remaining "honest" customers leave. The company's remaining funds go to pay office and administrative expenses. The company eventually goes away.

There have been two generations of failed person to person payment companies. I think I used several with names I cannot even remember. I wonder if there will be a third generation in a few years?