Thursday, June 02, 2005

User Agreement - GreenZap - The Future of Money. It's Zappening.

I have been reading the Greenzap user agreement, all is not quite as it seemed

User Agreement - GreenZap - The Future of Money. It's Zappening.: "Cash Balance versus Web Cash Balance. GreenZap is unique from other payment portals in that we have created a rewards system for our Users enabling them to earn and give away WebCash. WebCash can be used to send to anyone, to cover GreenZap transaction fees, or used to pay for (part or all) goods and services from GreenZap’s global network of preferred merchants. Your cash balance is money that you have loaded to your GreenZap account, received from a third party, or earned in GreenZap community rewards and can be disbursed. WebCash is not cash and is not disbursable. WebCash is a rewards program providing discounts or credit with participating merchants. WebCash can only be used, as the name says, on the web. WebCash credits can be changed or cancelled by us at any time without any prior notice to you, and merchants may cancel their participation at any time without notice."

Now understanding that Webcash is not cash is very important, because that is what Greenzap are giving away.
Effectively they are giving away a $25 coupon that may or may not have any merchants willing to accept it as part payment. If a merchant does accept it as part payment, the merchant can't use it for anything substantial.

Greenzap isn't as international as they first claimed

Non-U.S. Users. Non-U.S. Users, like U.S. users, must use a U.S. bank account to send or receive electronic funds to or from their GreenZap account, unless otherwise permitted by GreenZap from time to time in GreenZap’s sole discretion and subject to all applicable laws. In the event GreenZap permits a non-U.S. User to use a non-U.S. bank account for GreenZap transactions, the laws of the non-U.S. User’s home country may prohibit the non-U.S. User from using GreenZap to receive or send funds. It is GreenZap’s assumption that Non-U.S. Users are signing up for a GreenZap account only after determining that opening and maintaining a GreenZap account does not violate any laws or regulations in respective country and jurisdiction. If you are a non-U.S. User, you warrant that you are not violating a law or regulation by your utilizing GreenZap, and you indemnify us for any and all liability that might arise from your use of GreenZap.

It costs a lot of money to raise a check in $USD if you live abroad.

They used to claim all countries can use Greenzap, it turns out not to be true.

Non-Approved Countries. Users residing in the following countries are prohibited from opening, using, or operating GreenZap accounts: Cuba, Iran, Iraq, Libya, Afghanistan, North Korea, Sudan, Syria and Russia. The non-approved countries list may change without notice.

The only longterm use for Greenzap's webcash seems to be for paying fees

Fees. Following please find our fee schedule listed by transaction and account type. Fees are in US Dollars. Earned WebCash may be used to pay for any transaction fee. If your account has a WebCash balance,
Thus if you have loads of webcash, such as a merchant, you won't pay any transaction fees.

Hmm so that gets me thinking, where are Greenzap making their money, if the biggest source of income is in fees... ah Gold members

GreenZap Gold Account. A GreenZap Gold account, also referred to as a Gold account, is an upgraded account providing the User with a GreenZap Stored Value Card and a reduction on every transaction fee $2 to $1, in comparison to the Green account. To become a Gold member, you must transfer or deposit $100 to your GreenZap user account using a U.S. bank account or by mailing-in a Cashier’s Check or Money Order. The $100 is your money to spend and send as “WebCash”. Visit the “Servicez” section of the website to view an account comparison chart.

And ...

Gold Account Refund Policy. The $100 Gold account upgrade is non-refundable. The $100 is instantly converted to WebCash and deposited to your account. It is yours to send or spend on transaction fees and with GreenZap preferred merchants. It can not be disbursed as cash and does not expire. You may choose to close your account at anytime, which will simply void your WebCash balance.

Thus anyone who pays $100 in real money, ends up with $100 worth of webcash that isn't real money, just a coupon that can possibly redeemed when buying goods. Most people who upgrade will be merchants, who will be flooded with webcash anyway.

So Greenzap sign-up 50,000 merchants, who pay $100 each for gold membership because they will effectively never have to pay transaction fees again for using the service.

But Greenzap aren't going to make any serious money other than on deposited funds

GreenZap is Not a Bank. GreenZap is not a bank, and your transactions through GreenZap are not regulated as bank transactions. Similar services may be offered by banks, and if you wish to process your transactions through a bank, you should check with one or more banks and compare services. GreenZap is not a fiduciary, escrow or trustee and has no fiduciary duties to you. GreenZap only acts as your agent in processing your GreenZap payment transactions. You do not have to keep any balance of funds in your GreenZap account at any time, but to the extent a balance remains in your GreenZap account at any time, your funds remain your own funds when in the hands of GreenZap and will be placed in an FDIC-insured account with a bank in the name of GreenZap for the benefit of GreenZap customers. You agree that you will not receive any interest on such funds and that GreenZap may receive earnings credits or other benefits as a result of the balances held in the account with the bank.

Thus Greenzap will only be making money from Gold users paying $100, which effectively means they will never have to pay real money for transactions. They are holding money securely, but are not regulated, unlike other payment processors.

For anyone living outside the US, running a Greenzap account is going to be a major pain, but customers will jump at the idea of $25 of virtual money, especially if the merchant also allows the customer to use some of it buying their goods. It really depends on how the merchant interface works and how they can decide the ammount of webcash they will accept.

As an affiliate, I hope my earnings are not going to be paid in webcash

Thus sign-up for a Greenzap $25 coupon seems appropriate (note my secure link ;) )