Freemium payments platform ‘Spike’ launches open beta in Japan

Freemium payments platform ‘Spike’ launches open beta in Japan

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See the original article written in Japanese

Tokyo-based Metaps has launched on online payment platform called Spike, releasing it in open beta here in Japan. Spike is a web-based payment solution, and business users can start using it just by embedding a unique URL on their own website. Where it differs from similar services is in its business model.

Payment systems typically charge user fees, like a starting fee or a transaction fee. But Spike is instead using a freemium model. Currently they have a free plan and a business premium plan. For the free plan, there is no initial fee, monthly fee, or commission. Subscribers on this plan can transact up to 1 million yen ($10,000) per month.

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For the business premium plan, the monthly fee is 3000 yen ($30), with no commission charged until you transact more than 10 million yen ($10,000). Beyond that there’s a 2.5% commission and 30 yen ($0.03) charged per transaction. For this open beta version, only the free plan is available. There are plans to provide an API for business premium subscribers later.

I spoke to the CEO of Metaps, Katsuaki Sato, to learn more about this launch.

My understanding is that you are trying to innovate upon the existing business model in this field, sort of like PayPal did, rather than targeting developers by offering APIs like Stripe or Braintree. Is that correct?

Sato: Our target is those who want to use a payment solution but don’t know how to code. I am not really looking at PayPal, but our target customers could include people who have already tried out PayPal or think it’s is a bit too complicated to use.

Your announcement says that you will offer the starter plan completely free. Does this mean there will be no limit on the amount of the transactions in the future?

Sato: As we expand the service, we plan to raise the maximum transaction amount, and ultimately get rid of that limit. What I am trying to do is recreate a real-life economy using an internet payment solution.

That’s very ambitious. You have different target demographics for the two plans, individual freelancers and small businesses. How will you set the boundary between these two?

Sato: I don’t have any specific boundary between them, but I think of businesses who transact tens of millions yen (tens of thousands dollars) monthly, seed or early-stage startups, as middle-sized. We do plan to provide additional value like APIs for business-premium subscribers.

I see. When will you start offering the business-premium plan?

Sato: We plan to start running a pilot program in May of 2014 and launch it officially this summer.

Thank you very much.

In Japan, there are smartphone payments services like Square and Coiney, and payment solutions that focus on providing APIs, like WebPay. So competition in this area is becoming fierce. Spike’s vision of having no fees for starters has drawn a lot of attention. If it really works out, I think many businesses will use it.

Metaps core business is its Android monetization platform. Founded in 2007, the company now has in eight offices around the world. According to Sato, the number of game developer clients is now a few thousand, and the total number of downloaded Android apps that implement the SDK is between 1.2 and 1.3 billion. Sato also mentioned that 20 to 30 percent of the company’s sales are from the Japanese market, with the rest from China and the East Asian market.