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News  19, Nov 2012

The controversial Phewtick: one of the most viral apps today

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The Phewtick mobile app is making its waves around Southeast Asia. The Japan-based startup helps you meet new people and actually rewards you with hard cold cash for doing it.

Phewtick launched earlier this year at the beLAUNCH conference in Seoul, South Korea. How does it work? First of all, you set up an account through Facebook. Once logged in, the app will read your phone’s location and give you a list of people in the area. You can view their profiles and decide to meet up with anyone on the list. The app will generate a QR code for both you and your new friend, which must be scanned by the partner’s phone to prove you actually met. Then the game begins, which you play together for points. You can accumulate points and cash them out once you hit a certain amount.

Business Model

An article from Venture Beat says that the company plans to make money by offering both traditional and localized advertising. Basically companies can sponsor meetups around a targeted area, thereby increasing brand awareness. This is done by buying Phewtick in-app points, which must be achieved at their venue. Companies can also sponsor the ads and their own games on the app.

According to a post on Phewtick’s Facebook page, the company claims to have achieved 200,000 meetups in a single day. It was also quick to reach number one in the free app category on Singapore’s app store earlier last week.

Claims from netizens saying they are unable to cash out

While the app has been around for some time, the activities around Phewtick seem to be constantly growing. Friends from Singapore and Malaysia have been constantly sharing their Phewtick activities on my Facebook news feed. There are even creative users who set up Facebook groups to earn points even when they are in front of their laptops.  While the business model works — it drives user engagements and traffic to restaurants –recently there have been some complaints and claims saying that users are unable to cash out their earnings.

The team from Crownsify, a Singapore-based startup in private beta, also claims that Phewtick is a scam.

Of course, it can be argued that Crownsify operates in the same space and the claim might be a gimmick to downplay its competitor’s reputation. It can also be argued that it takes time for money to actually reach a user. Then again, the cash is transferred through PayPal, which is a quick way to send payments online.

What Phewtick has to say

We reached out to Phewtick to clarify the claims. They responded that they do not pay users who earned their points fraudulently.

“Thank you for your mail. As we posted in Facebook and Twitter, this is a hate campaign by a competitor. Also, we don’t pay money when we detect a user earned points fraudulently, such as creating unknown accounts, disguising location data, or scanning QR codes through photo sharing. Without the fraud case, we have surely paid money to users.”

Other concerns from users

Speaking of PayPal, there were also concerns that Phewtick is collecting and storing users’ personal information from their contact list, PayPal account, and their Facebook profile. Phewtick was quick to dismiss the claim through their Facebook page.

“We would like to respond to some rumors in social media. Phewtick never steals users’ personal info about contact list, PayPal account, or facebook profile. We just would like to give a new social tool to greet your friends and meet new people in a fun way. If you still have any concerns, please contact us easily. We are always open and honest to you. Thank you.”

Importance of credibility and reputation

For startups, the most important thing is your users. While the idea of being able to earn some extra cash is very attractive and helps fuel app virality, and while it does deliver real value to users (meeting new people) and merchants (driving traffic to outlets), once the trust is betrayed, it would be hard to earn back the tarnished reputation. I don’t know about you, but the Facebook feeds of Phewtick are a little too spammy for me.

If it is for you as well, here’s a fun video to lighten up your day:

So, how many of you are on Phewtick?

Jacky Yap

Jacky Yap

Having spent one year abroad in Shanghai under the NUS Overseas College Programme, Jacky has an avid interest in entrepreneurship and web based startups. Jacky used to run N-House, Singapore's first entrepreneurial themed residence in NUS, and was also part of the organizing team for Startup Weekend Singapore 2012. You can reach him at jacky [at] e27 [dot] co

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