A chat with the head of Piryx, democracy’s PayPal

Payment system designed for political candidates, non-profit groups

Piryx is trying to become a one-stop shop for non-profits and politicians who are looking to raise serious cash for their causes.

Over the past decade, the Internet has become a major source of donations for political campaigns and non-profit groups. Piryx, which made its official debut at Network World's DEMOfall '09 this week, is trying to become a one-stop shop for non-profits and politicians who are looking to raise serious cash for their causes.

But it’s not just about campaign cash: Piryx also lets groups receive digital reports on their donation activities, review and audit all online donation filings and keep track of potentially inappropriate donations. Among other things, Piryx has helped launch the campaign for rocker Jon Bon Jovi’s Soul Foundation, a nonprofit aimed at alleviating poverty and homelessness.

In this interview, Piryx founder and CEO Tom Serres talks about the inspiration for his company, what it costs to use Piryx and how he plans on dealing with the threat of politically motivated DDoS attacks.

What is Piryx’s target audience and what is Piryx providing them that PayPal currently cannot?

We were originally aimed at political organizations who needed help doing rapid response for online fundraising and who were doing the same things that Barack Obama did, but having the added capability seeing where the donations and support are coming from through all points of virtual connectivity, whether that’s through Facebook, Twitter or blogs.

One recent client we signed up was Rep. Joe Wilson, who became famous for calling the president a liar earlier this month. There was a massive surge in both support for and opposition against him. And he came to us to set him up with an online fundraising page because for him to set up a processing account and then track where all the donations were coming from would have taken a long time using the PayPal API.

So we had him up and running in about five to ten minutes and in real time he was able to track where his messages were going, why people were donating to him and so forth. Once he got up and running, he was raising $1.5 million through our system in a matter of days. Had he relied on traditional payment processors he wouldn’t have had that kind of customization and he wouldn’t have been able to deploy it as rapidly as he did.

How exactly does it let the user have that level of detail?

When you create a payment page you can tie it to an affiliate tracking code. Then you can push it out to a particular channel such as Facebook, a blog, a social evangelist, a product evangelist or an e-mail marketing campaign. It’s a gateway for you to communicate with people who might be receptive to your message. So as a donor you can navigate to that donation page and you can make that donation and then the organization that initiated that page can determine why you were there. They can determine how much of their money they raised from Twitter, Facebook and so forth and get a better understanding of what messages people are reacting to.

So let’s say I’m a politician looking to set up an account with Piryx. What steps would I have to go through.

When our clients go through our setup process we’re going to ask them for things such as bank account numbers and routing information. If they’re a corporation we want their employer ID number, their corporate tax ID, things like that. There’s a verification process and we have automated ways of setting them up through that, and we do that to make sure they aren’t fraudulent users. The basic process is that you fill out a form with all the pertinent information, you submit it, it activates your account and then sends you a link to authenticate your e-mail address.

What percentage of each donation made through the system goes to Piryx?

Basically Piryx gets 4.5% every donation to start. Then once your campaign or organization raises $100,000 we gradually cut the rate we take per donation. Then once you get over $1 million in total donations, we take 4% per donation.

You were hit by a DDoS attack after Joe Wilson shouted “You lie!” at President Obama earlier this month. Do you think that as Piryx becomes more of a home for politicians and political organizations it will become more of a target for DDoS attacks? How are you preparing for that possibility?

Yes we are and despite getting hit with that DDoS attack, we’re even further along in shoring up our protection mechanisms than we thought we’d be at this point. Keep in mind that we’re still a small startup company and we have around 150 users nationwide, up from around two users back when we first launched in February. We’ve been under the radar until DEMO rolled around this week. This is our big coming out party.

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