Micropayment Wars Are Over... PayPal Wins?

Snocone writes "Cringely's latest column asserts that PayPal is now sufficiently dominant that it is pretty well certain to achieve de facto standard for micropayments over the net. Goes into the history of PayPal and why their model works where no one else's has. Even if you don't agree with him, there's some good insights into digital currency infrastructure to be found here." I now use paypal to pay my girlfriend back when she picks up dinner and my roommate pays his share of the rent using PayPal. Its great... although with the $5 they pay in referrals, plus the $5 they pay to new users, ya gotta wonder ... (if anyone wants to use me as their referral, thats cool *grin*). its actually making the Tipping Jar concept practically feasible. I mean, can I tip artists a few bucks when I enjoy their MP3? Can I tip a few bucks when I enjoy reading someone's website? The potential to change a lot of things is within reach.

Comments

Perhaps, but the United States Alone...

[Outlyer]

Paypal is a great system, of course, this is in theory, since it is currently not possible to use it in Canada. So, basically, I can't use it. For that matter neither can a European, Asian, or anyone else. I think it's a little presumptuous to assume that the success of Paypal in the US is any indicator of whether this is actually useful in the real world. By that, I mean, the entire world.

I use Paypla on AOLiza

[KFury]

I threw up a 50 cent donation link on the AOLiza site a few days ago and I've already gotten a good response. A few people decided to 'buy' multiple donations, upping the donation.

It makes me feel a lot better than throwing up a stupid banner on every page just to get some money. Apparently it makes my visitors feel better too.

Paypal rocks, though I'm really disappointed that they dropped support for the Palm...

Kevin Fox

eBay's effect on the net.

[Matt2000]

It seems to me that the problem with previous micropayment schemes was not the scheme itself, but that there was never a situation in which the convenience of using the system outweighed the risks associated with trusting an outside party with your money and transactions.

eBay provided the fluid marketplace that created the situation where that convenience overrode the inherent mistrust of a newcomer like PayPal.

eBay brought the idea of the auction as a sales model to the forefront of the net, they also pioneered community based trust mechanisms that let their model survive even though they don't back transactions directly (something that would have quickly invalidated their business model).

What was supposed to be a concept that allowed high-brow concepts like online media micropayments seems to have come about largely because of the requirements of some people to sell $5 pens and beany babies.

Probably important not to forget that no matter how large the venture capital some firm gets to change the internet, most likely it won't succeed unless we decide it will.

You lose your rights if you use PayPal

[Mr. Protocol]

I started out to register at PayPal, but because this was actual money we're talking about here, I took the time to read the agreement.

Bah! Feh!

If you use a credit card to pay for goods and services, you have the right to withhold payment for non-performance. The issuing bank charges back to the vendor in such cases.

You give that up with PayPal.

There's this long paragraph about reversing charges. In the event that you reverse a charge, you authorize them to turn around and re-charge your card. As many times as you reverse the charge, they'll put it back on.

Once you give money to PayPal you'll never see it again unless and until you sue them.

Incorrect; this was changed recently

[jbs]

From the current ToS:

Charge Backs. The Buyer Protection Guarantee does not obviate any other consumer rights Users may have, including charge back rights that may be granted by the User's credit card issuer.

Re:Tipping

[burris]

Tipping works in the real world, ask buskers (street performers) waiters, valet parkers, and the guys at the curb at the airport (talk about the cushiest job at the place...). There are longstanding cultural traditions of tipping. Sure, a few jerks don't tip but the vast majority do. In the virtual world, if some copy is made somewhere and nobody sends in a tip then it isn't any sweat off the artist/publishers back, so to speak.

The reason why shareware thus far hasn't been wildly successful for generating revenue for the authors (clearly it provides other value, otherwise people wouldn't continue to make share ware or even open source software) is the barrier to payment. It is relatively easy to leave money for a waiter or toss some money in a street performers hat but it is much more difficult to write a check and put it in an envelope and mail it, or call a number and read off a credit card. When tipping becomes as simple as clicking a button on your MP3 player while it's playing a song that you like, tipping will become a viable revenue model for artists and other information publishers on the 'Net.

Burris

Don't like where this is going...

[DreamingReal]

I'm going to put on a different hat for a second and ask is this really where we want things to go? Micropayments for everything?

Sure, I own some CD's that I love so much I would have paid $50 for them. A tip system would be great to show my gratitude to the artist. And as the poster wrote, there are some personal websites that had me ROTFLMAO or greatly influenced me as a web developer and designer. I would love to send them $5 and say "Thanks! Have a beer on me."

That said, I wonder how long it will go on before things we used to do for pleasure and personal edification are motivated by the prospect of being micropaid for it. Art by the amateur has always been done for the love of producing art - it freaks me out a bit to think that amateur art may now be done for micropayments. Obviously, that's not the sole reason it's done but it could certainly be a motivator now. As an example, most /.ers participate because they enjoy participating but, be honest now, karma is definately a motivator, right? And what is karma? An abstract point system for quality posts - it doesn't really do anything but make you feel good. Now imagine if karma were micropayments - even more incentive right?

I guess I'm just wondering if micropayments will devalue the intrinsic good of things like art. I pull off and help someone change their flat tire or return a lost wallet to contribute good to the world, not b/c I'm hoping for compensation. A "Thanks a lot" is the only compensation I want. And while this may be extreme, it's possible these things could be motivated by the micropayment.

"Hey, nice shoes!"
"Thanks, here's a $1 micropayment!"

I realize that is a silly example but it helps to illustrate the possible trend towards money being the sole motivator and compensator for everything. I remember reading an article a while back about sites like Epinions and "expert" sites. They explored why people would devote large amounts of time to writing reviews and answering questions for complete strangers. The short answer was "egoboo" or ego boosts that came from being positively rated as a reviewer. But it made me proud that these sites went counter to the idea of the net being a commercial medium, like the corps view it. I was proud to be involved with a medium that is about free exchange of information and assistance with the motivation being the virtue of helping someone else out without compensation. I just wonder if micropayments for everything will threaten that notion.

Sorry to play devil's advocate but I have only read about how wonderful a micropayment system will be in light of the whole Napster fiasco. I've just been waiting for the other shoe to drop...

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