Gittip charges fees of $0.30 + 3.9%. They say that they use Balanced Payments, which charges $0.30 + 2.9%, so Gittip is taking a 1% commission on all money that enters the system.
For the sub-dollar charges, keep in mind that the fees are levied for the sum of your tips (assuming no one tips you). So if you only tip one person $0.25 then it's highly inefficient, mostly a 'tip' for the credit card companies.
At 1x$0.25 tips, this structure has an effective overhead of 124.9%; at 10 tips its overhead is 15.9%; at 100 tips, it's 5.1%; and at 1000 tips it's 4.0%.
One solution would be for Gittip to implement something like an account balance. Say I charge my Gittip Wallet with $25 seed money. My CC gets charged $25 + $.30 + 3.9% ($26.07). I set up $1.75/week of tips to various people. My Gittip Wallet gets dinged $1.75 per week for 14 weeks ($24.50). On week 15 when it comes time to give my $1.75, my Gittip Wallet is too low. So it gets another $25 bump (my CC gets hit with another $26.07) and we're good to go for a bit. Wash. Rinse. Repeat. Make the auto-bump amount a user selection in case someone is gifting $30 a week, they could auto-bump at say $100 a pop.
Edit: Also, if I understand correctly, if I am getting tips, that would also go into the same wallet. So in theory the tips I receive would extend the amount of time between auto-bumps. Or not at all if I'm getting more than I am giving.
yes. In SF Bay Area we have FasTrak for bridge/road tolls. Clipper card for public transit. For each, you keep some balance in your account that gets depleted as used and is recharged as needed.
If they took PayPal (which works for both sides of the system using Mass Payments to pay all the recipients), they'd be able to opt for 5% + $0.05 with the micropayments service. On a $1 tip, it's the difference between $0.33 and $0.10 in fees.
