Blippy launches the Twitter of personal finance

Blippy is one of those ideas that at first sounds so hilariously misguided that you'd be forgiven to think it a joke: It's a service that hooks into your credit card so everything you buy gets broadcast to your friends. Eventually you'll even be able to Twitter your spending. Ack!

Fortunately, the real story is more nuanced, more interesting, and more intelligent than you might think if all you read is the knee-jerk Twitter posts from people like me.

I talked today to Blippy co-founder Philip Kaplan about the service. He admits, "When we launched it, we thought we were kind of crazy." But I do believe he is on to something, and it it has more to do with collecting your financial data than sharing it.

Blippy lets you hook credit and debit cards into the service, as well as accounts at online stores like Amazon, Zappos, and Apple's iTunes store. Eventually it may even connect to physical retail, like Safeway. Blippy's very useful trick, which the company is still working on refining, will be collecting your financial transaction data at a very granular level. It will tell you not just where you're spending money, but what products you're spending it on and--if you set up the privacy settings appropriately--who else is buying the same stuff as you. It will combine all your spending data into one big stream and let you compare your purchase data to that of other people, again at a granular level. Eventually you'll be able to see if you're paying more than other people for Ben & Jerry's Chunky Monkey, I gather, and find deals on items you like or purchase regularly. Mint, by contrast, shows you comparative data by category and vendor, but not by item.

That's the vision, at any rate. Currently, in Blippy's very closed alpha test, it's a system for sharing transaction data. You give it a credit card account and other account info, and it will tell your Blippy friends what you're buying, and vice versa. For example, you can see what music and apps your friends are buying on iTunes, and then you can have a conversation about those purchases. There are privacy controls, of course, and you can "pause" Blippy's data collection if you want to buy a secret gift on Amazon. Or, as Kaplan says, if you want to buy something private on a credit card, don't use a card connected to Blippy.

It sounds like the last thing anyone with a sense of personal space would use, but Kaplan maintains that much of our commerce is not only not private, it's not even "important enough to tweet." Judging from the activity on Blippy, it can still be a decent conversation starter. And indeed, in a future release Blippy will be able to (optionally) update Twitter and Facebook when its users transact.

Future privacy features in Blippy may include the capability to lock out certain vendors from credit card data collection, and possibly an approval step for transactions before they're made public. Already you can set up your account as either open or protected, meaning, as on Twitter, you can let anyone follow you or lock it down to just those you approve.

I'm intrigued by one of the tenets of Blippy: Kaplan is interested in what he calls "passive sharing" of information. With this service, you can "check in" with your friends when you buy something--like a coffee at your corner Starbucks. Your transaction is a location beacon (I'm not sure the credit card data is updated quickly enough, but that is the vision). "Nobody is taking advantage of the fact that I'm swiping my credit card everywhere," Kaplan told me. Twitter, Facebook, Fourquare, and Gowalla require a more active check-in. (Another location check-in service, Stalqer, has a neat trick for passive check-in.)

It's not likely that old-fashioned relics like me will use this service to share financial data, mind you, but I do find the concept of using a financial system as a Foursquare-like input tracker interesting. And I would like a system that does an even better job than Mint of tracking my spending and comparing it to others.

Kaplan says he's not working on the revenue strategy yet. The company was incubated at and funded by Charles River Ventures, where he was Entrepreneur-in-Residence until last week. Potential revenues may include an affiliate model that kicks some referral money back to users when their connected friends buy what they've bought, but Kaplan doesn't want to "pay people to use Blippy," so the idea would need refinement. Blippy may also get its own credit card deal; right now you have to connect an existing card to the system to use it.

Blippy is in a closed alpha test right now. You can sign up for an invitation on the site, and it will open up in stages over the next few months.