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Whatever Happened to Micropayments?
prostoalex writes "Remember Flooz? Or Beenz? With a few notable successes (PayPal, and that's about it) online micropayment industry is saving its success stories for future generations. New York Times reports about two nascent micropayment systems, one coming out of Stanford, one out of MIT, that are supposed to help the content producers and Internet users to engage in less-than-a-dollar financial transactions without huge overhead costs, so typical of credit card payments. BitPass requires you to purchase a virtual debit card with a certain amount on it to pay for products and services, and PepperCoin consolidates numerous micropayments into one bill that is then split between the content providers that managed to sell their product to the Internet user." I still believe that single penny transactions will revolutionize the net.
I still believe that single penny transactions will revolutionize the net.
/. would allow us to quantify the value of the elusive first post:
Plus, a micropayment system on
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at $0.01 per Slashdot page hit, an FP would be worth $3.97.
I'm much funnier now that I'm a subscriber.
I'll bet ya $0.000838 that it's not over yet.
Je t'aime Stéphanie
The mere fact that the article reports on two different systems highlights an enormous problem in the world of micropayments: competition creates more problems that it solves! The beauty of a micropayment system is that one doesn't have to keep an account with a single provider, and oftentimes these providers are small enough so that an account would be senseless anyway; the issue created, however, is that consumers moving from one provider to the next are going to need a common ground for payment between them. Although this is what a micropayment service is supposed to be, a flourishing of different micropayment systems will mean consumers will have to stick to one and be limited in where they can spend, or go through the hassle (and probably expense) of creating accounts with many, partially defeating the original purpose. What do I see happening? 1. A single system gains the monopoly, and micropayments start to actually look worthwhile. OR 2. Consumers just continue to resort to big name information providers which they create accounts with, maintaining the status quo. If the e-coins system I was a member of earlier in theis decade is any indication, I see the latter as the much more likely of the two evils to occur...
Even single penny transactions are too big. What will really matter are fractions-of-a-penny payments. Things will really add up in volume.
evanchik.net
They were monopolized and price-fixed by ebay, just like online auctions were. Have you looked at the prices for paypal and ebay auctions recently??
--
1-800-759-0700
Getting to the single-penny transaction is a major milestone that's still a ways off into the future. I think the more likely model is one of those mentioned in the article, whereby the consumer purchases a set amount that is drawn down over time. The trick is to get that account to cover a wide enough variety of content so that people would be confident of getting value from it. There's no use in having to fund a Go.com account, a NYTimes.com account, and CNN.com account just to do your regular reading...
Stop by my site where I write about ERP systems & more
Yeah, haven't you all seen Superman III. All those 1/10 penny transactions can make you rich like Richard Pryor!
Call me an old curmudgeon but I think micropayments are just another new way to be (pardon the pun) nickel and dime'd to death. My bank already does it with service charges, my phone company does it with every little "feature", my cell company does it, et al ad nauseum.
The only ones that will PROFIT!!! from this are the big companies pushing it on us.
Trolling is a art,
BT have a system which allows you to make these kind of online purchases eg this
Is that what you mean?
--
This sig is inoffensive.
I wonder when individual music artists will be able to take advantage of better systems like these for distributing their music rather than the major record labels-- at least those who really want to make any profit from anything other than their concerts and merchandise...
KappaStone
Whatever Happened to Micropayments?
I believe they fell through the cracks.
Eve Fairbanks says I drive a hybrid!LOL
Whenever you surf to an advertising-sponsored site you are paying.
I believe the problem with micropayments is the lack of a 'lender of last resort', namely a government backing the scheme. In countries where governments have shown an interest (Finland, Japan,...?) micropayments seem to work just like any other kind of virtual cash.
Certainly there is no technical hurdle to overcome: compared with giving someone your credit card and saying 'I trust you to take what I owe you and no more', and sending them a 'cheque' by email (PayPal) or by SMS (a system I wanted to make), it's clear that a payments system does not have to be perfect to succeed, it just needs backing from banks and government.
Presumably banks are wary of real micropayments because they make so much money from credit cards, the main alternative.
Presumably governments are wary of real micropayments because they see their tax bases being nuked.
I don't see either of these fundamentals changing soon.
PayPal succeeded because they found a niche that was opening at the time, and were were very good, very lucky, to exploit it fully. But without credit cards in the background, PayPal would never have worked.
Ceci n'est pas une signature
Nickel Exchange was a good idea although it obviosly didn't work out.
Ricky Silk
kung foo ezine let me waste your time.
The problem with there being competing systems for MicroPayments is that consumers don't want to have multiple accounts (well at least I don't anyway).
Let's say Slashdot joins MicroPayment provider X, and New York Times Online joins MicroPayment provider Y, I need to have accounts with X and Y if those 2 websites happen to be in my favourites.
Interoperability needs to be sorted out right up front; otherwise no one company will be successful.
The obvious players are Visa and Mastercard. I suspect that they are just treading water until there is a whiff of possible competition, at which point they will swoop in together make MicroPayments happen between them.
Except for the people building the systems.
The costs of processing and verifying tiny transactions make it difficult to process such payments and make a profit.
Conformity is the jailer of freedom and enemy of growth. -JFK
The stupid names. "Flooz"? "Beenz"? And I'm not thrilled with "PepperCoin," either.
Aha! So /. pulls a Microsoft. Subscribe for the win!
Paypal also had a lot of marketting muscle and a catchy name.
To top this off, Paypal also started to guaranty their purchases.
It also ended up being the way that Paypal was used for other payment services because of the debit card that allowed it to prosper. I would for instance use my Paypal card to pay Billpoint or PayDirect if it was offered. This would get me 1.5% back.
StormPay and C2it are the services frauds use. Bidpay is reasonable, but never use it to pay for anything just to be paid.
The author misses Paydirect, which controls Yahoo payments. This is a decent service and is in some ways a superior "eshopping cart" service. Many small websites or discount hardware websites use Yahoo stores and the PayDirect service.
I do agree with the author that "penny payments will revolutionize the internet though" - I see the internet broadband/wifi/otherwise being free in most cases within 10 years. I see ISPs as selling "credit cards" rather than subscriptions. These cards would allow you to send and receive email and view websites. The ISPs in turn act as a bank for websites such as Slashdot. Paying them for the number of views that have crossed their service say 1/100th of a cent for every page view.
I think email should cost 1 cent to send, 1 cent to receive. I think it should be 1 penny each page/email view or bulk 1000/100MB /views for $1 -- 10,000/ MB/ views $10 -- 100,000/MB / views $50 - therefore sites that want to remain free can, sites that want to charge can almost transparently.
Yell & scream & rant & rave... it's no use... you need a shaaaave ~ Bugs Bunny
What worked best was simply putting an inexpensive yearly fee in place. People pay once and can forget about worrying about any recurring charges or running up some kind of tab that will only come back and surprise them later.
After a year, more than half of them renew their accounts too. And just so they can have access to a giant database of humorous, strange, and twisted photos and media files. Go figure ...
to deposit all the spare change that builds up in my car, I'd be making my penny transactions like there's no tomorrow!
KappaStone
Disaffected youth #1: I still believe that single penny transactions will revolutionize the net.
Disaffected youth #2: Are you being sarcastic, dude?
Disaffected youth #1: [dejectedly] I don't even know anymore.
Let's have lots of them!
If you were blocking sigs, you wouldn't have to read this.
Governments are supposed to be responcible for maintaining a robust and useful currency system. Supplying a robust currency system should be a slam dunk, no brainer extension of the current monetary system. Online, government secured currency is what is needed.
One of the reasons a 3 cent transaction is doable is that there is not a business making the transaction unworkable by adding a fee. The voter is once again uncouncious, failing to force government to live up to its obligations.
HenryJamesFeltus.com
I know that somebody always mentions Apple in /. stories nowadays, but does anyone know how they overcame the micropayment issue with their iTunes Music Store? I would think that some lessons could be gleaned from their experience with it.
Slashdot's first reaction to VMware
Microsoft when you need them?
It's the mobile network operators that are going to be the ones to own this market.
The reason? These companies have a massive existing subscriber base in the hundreds of millions. Already the mobile companies in Europe are banding together to create an interoperable payment platform.
One of the major problems that micropayment providers have is acquiring merchants. While sub-dollar transactions sound good from the customers, for some merchants the proposition is not as attractive. This is particularly true for large merchants who are particularly beholden to the banks, card companies and other acquiring institutions.
with iTMS, didn't they? Or maybe they just rely on one-click shopping to be the crack that it is, which assures the CC companies the ratio of worthwhile charges will overwhelm any expense incurred with those single 99 cent charges.
I suspect that, as with the labels, there was a sense that this was one of those "experiment with a 3% population" things, and they saw they could make money.
This is why I'm founding Micropayment Cooperative (MC). All I need is seed money to get it off the ground. If everyone sends me just $.000025, I should be able to get this up and running within a week.
Best Windows Freeware
When will digital tech be mature enough that people will have the same confidence in it as other mediums i.e. paper. If I'm not mistaken one responsibilty of the US Federal government is the issuance of a common currency. The reason for this I believe is to promote interstate commerce throught the use of one standard. My opinion is that this is actually the Govts responsibility. what do you all think.
Xanadu was the first system for reverse linkable, micropayment ready, Super-HTML system.
.0002 cents for accesses to debian mirrors? I certainly would IF IT WAS EASY.
It was set up originally to help content manufacturers so they could choose how much to reimburse their goods with. You could choose free, if you wanted.
Bandwidth still costs no matter what, so this could at least pay for bandwidth. And who WOULDNT pay
Xanadu also provided for searchable media: An mpeg movie is linked from IMBD to a section of frame 23508-24003 on the movie servers. The content people then would access a porportinate cost to that snippet. Who wouldnt agree to pay 4cents for that access?
And now for those whining that that network wouldnt be "All Pay", if you create content, you can get money too. It's like a payment counter that goes both ways rapidly.
Instead the HTML One-Way links, dead links, leeches, and no accountability system started. And it started ONLY because Xanadu was closed, secret system then (80's-early 90's), and HTTP/HTML was Public, known system.
Let us not forget that credit cards may be the cause behind SO much unfair cost to the American people, and those of the world for that matter. The interest rates on most credit cards are REDICULOUS, even for those with good credit.
And worse, not only do credit card companies make money off of the consumer, they do so off of the retailer as well. Micropayments may one day create a way to subvert Mr. Visa and Mr. Amex, (whateversupremebeingorlackthereofyoubelievein) bless them. Small businesses would receive HUGE breaks if a working micropayment system could be implemented. I applaud the efforts of all institutions working to further the concept of micropayments.
Think about it, how long are you going to let the already rich credit card companies get richer off of online payments that cost them jack?
Let's get one thing perfectly clear, I did not vote for George W Bush, and I do not endorse what he does or says.
"
If we are going to have the concept of micro-payments, why can't we have micro-content providers?
I regularly post to Slashdot. I am essentially a micro-content provider to Slashdot. I have posted over 800 comments, many of them high Karma scorers. If I made, say, one cent per Karma point, then I would be about 30 dollars better off by now! Woohoo!
Simpay is probably a candidate for this, founded by Orange, Telefónica Móviles, T-Mobile and Vodafone:
http://www.simpay.com
Perhaps these smaller systems, unheard off by most people, are being replaced by more well know organisations, which people have some level of trust in. E.g. Natwest (large UK bank) have something similar: http://www.natwest.com/personal/services/onlineser vices/index.asp?navid=PERSONAL/ACCOUNTS_SERVICES/O NLINE_SERVICES/FASTPAY
You will forget this sig before you next see it
I've started leaving the spare change when I buy little stuff like coffee, takeout food, and trinkets at small shops. Imagine what would happen to the economy if everybody left their 37 cents after buying coffe? The people working minimum-wage at the coffee shops would be making over $30/hour! I think 'micropayments' in real life (not online) could seriously revolutionize the economy, it would finally give the poorest amongst us the ability to make decent (and tax-free) earnings.
"Sometimes, I think Trent just needs a cup of hot chocolate and a blankie." -Tori Amos on Nine Inch Nails
if we (the gnutella community) could successfully integrate bitpass transactions with gnutella content, we may offer the biggest non-infringing use of gnutella yet (and shut up the RIAA).
smd4985
but they left it out.
http://cashets.com
It had some security issues when I first looked at it (you could change the amount an item cost, including changing it to a negative number thereby syphoning money out of the seller's account and into your own) but at least the latter part is fixed now.
Taco, if you really believe that, then Slashdot is the place to launch TacoBeans the new micropayment solution from OSDN. Seriously.
If you don't really believe it, why did you say it ?
--- These are not words: wierd, genious, rediculous
Most micropayment companies have failed in the past for two reasons:
1) They debuted at the height of the dotcom craze, when advertising money, venture capital, and ludicrous business plans were everywhere. Back then, users were getting so much of their online experience subsidized by these factors that micropayments weren't attractive to them. Now, in the depressed post-boom environment, micropayments are becoming attractive to consumers again.
2) Most micropayment companies focused on the wrong markets. Micropayment companies have traditionally focused on large content providers, trying to get already successful businesses to change their business model to something their consumers were skeptical or even resentful of. BitPass, however, has instead focused on a bottom-up approach, marketing to individual content producers like webcomics creators, artists, and musicians, who haven't been able to charge what their work was worth until now. I think this is going to be the deciding factor in their success.
I'm working on a BitPass user group site to help the BitPass community grow. If you're curious, I'll post to my journal when the site is up.
He who refuses to do arithmetic is doomed to talk nonsense.
No ma, I'm not a loser, I'm just saving my success stories for future generations. Yea, that's it...
Laugh at stupidity: mod idiots +1 Funny.
I belive micropayments is a great idea, I mean, sometimes you actually would want to transact very small amounts of money when buying like... A mp3.
/$ extra just because the transaction company wants to charge you that much no matter what.
But then you woulden't wanna pay 1
How does the person who "donated that money" not spending it elsewhere vs the person it was "donated" to spending it going to change the economy in any way?
Yell & scream & rant & rave... it's no use... you need a shaaaave ~ Bugs Bunny
I've been saying it for years, and I continue to be right. Micropayments don't solve a customer problem, they solve a provider problem. If you don't solve a customer problem, you don't have a success. Nobody wants to be nickle and dimed to death on the net. It's time to retire this monumentally dumb idea.
The amount of time, effort and money poured down this rathole is really sad.
And the answer is, they will *never* happen. read all about it here. In that article, Clay says so much, so perfectly, that I won't quote any of it--just go and read the whole thing. OK, I can't resist. One of his points is micropayments have too much "user overhead"--you have to make a descision for literally every penny you spend, and that alone makes it not worth it. As he says, the user is getting conflicting messages: "This is worth so much you have to decide whether to buy it or not" and "This is worth so little that it has virtually no cost to you."
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
Once a micropayment company becomes really successful, Paypal will buy them out, and integrate their services with Paypal's. This will make them the de facto standard on the Internet, and the other micropayment companies will die.
mod this paranoid ckook down please
Banks control financial transactions in the western economy, and with banks charging $1 - $3 for ATM transactions (and similar outrageous fees for services that were once considered part of the package of using a bank) there is a very strong incentive not to create a micropayment system that yields $0.001 transaction fees.
sPh
Scott McCloud just put up a BitPass only comic at - http://www.scottmccloud.com/comics/trn/intro.html He's been proselytizing about micropayment since his book "Re-Inventing Comics".
Until you can convince consumers and possibly their service providers to accept micropayments, you might as well employ trained chimpanzees to do the actual processing.
Ugh. Micropayments were a bad idea back in the dot-com days where they were concieved, and they're still a bad idea today. People won't visit sites where they are going to be (literally) nickel-and-dimed to death. People don't want yet another financial account to keep track of, yet another critical login to remember.
Even if one of these schemes manages to attract an appreciable following, large enough to be noticed by the credit card companies, then what? All it would take is a simple policy change to put them out of business. Maybe $50 gets unlimited sub-$5.00 transactions per month, or something like that. The whole micropayment concept is necessitated by the desire to avoid high transaction fees on credit card payments. Once the credit card companies wake up and provide a plan tailored for the smaller retailer, the entire micropayment industry disappers. Perhaps it will take a micropayment company that looks like it is on the verge of real success to do it, but as soon as they attract the attention of the big boys, they will be wiped out, pretty much overnight.
Any business that can be invalidated by a policy change by a larger, competing institution is not, in the long term, viable.
The big problem for micropayments is this: Are they automatic?
If people have to take deliberate action to spend a penny, it's not going to work; at $7.20/hour, if it takes them five seconds to read and respond to a prompt, they've spent more in their time than the penny they're paying.
However, if the payments are made automatic, a different problem takes over: People aren't culturally ready for having their money spent, by a computer, on their behalf. Never mind that every time their thermostat turns on, it's spending their money -- that's sufficiently hidden from the users.
The only way I can see micropayments becoming mainstream is if they are refundable within a given time limit -- but that would only work if people don't start "charging back" all their payments.
Tarsnap: Online backups for the truly paranoid
e-gold
And other e-currency thingies...
I hereby declare the following idea mine: what if you just charged micropayments, and it worked? Suppose that it costs 3 cents to process a 1 cent transaction, but if you're doing 80 billion transactions a month, you don't care because:
1) one day, people will find a way to make it profitable, and
2) when that day comes, you'll already own the market & make back everything you lost.
Just do business & wait for technology to catch up. There's too much fussing about whether or not it would be profitable from the get-go.
stuff |
Monopolies are not the answer. This exact same argument was made in the OS market that there needed to be one monopoly that controlled the operating system, so that all the different software vendors would be able to have a common platform for their programs.
In general, competition creates an environment where products get better. The problem at this point is that there is not enough companies working on micropayment models.
The long delay in establishing micropayments was created in part by monopolistic thinking. Companies like cybercash went into the business with the contemptuous notion that they would first spend hundreds of millions of dollars of investors capital to create a monopoly, then when they had a monopoly, they would be able to bring in the paradise of micropayments.
These large investor capital fed monopoly dreams undermined other more promising approaches to the problem, then exploded in dot com fashion.
There is a lot of merit to what you say about the consumer being confused by multiple solutions.
I suspect the ultimate solution would be for a standards committee to define an interface. With an established interface you could then have competition among smaller companies that plug into that interface.
The monopoly recipe, however, is a guaranteed path to failure.
They would have to agree to an expense account for buying Karma. I'm not cutting into my profits for a few extra points when... I've probably said too much.
Slashdotter are stupid and biased.
Because rich people don't on average spend as much money relative to their income than poor people do. Give it to the poor and they'll spend it because they have to.
Mad Software: Rantings on Developing So
That is very insightful ... where's my mod points?
;)
Maybe a site like Slashdot could charge "micropayments" but rebate to it's users that have high moderation. This may have an effect on eliminating troll posts and encourage well thought out responses.
I too pride myself in the high moderation I get here & substantial page views/responses I get elsewhere. I mainly use this site & other Mac Chat/Forums sites as a way to "micro-advertise" my website & my eBay auctions. I figure, if people think I say something interesting I must be selling something interesting
I almost want to pay you for thinking about that!
Yell & scream & rant & rave... it's no use... you need a shaaaave ~ Bugs Bunny
I guess that makes me a proponent of micropayment no?
From excellent karma to terible karma with a single +5 funny post...
"Flooz? What kind of stupid weiner name is that?!"
Micro-payments are alive and well and operating on mobile phone networks the world over. Next generation mobile phones will link directly to your PC, thus providing an idea micropayment structure via a "known" organisation (rather than people like PayPal).
Micro-payment is here, its just not where you were looking.
An Eye for an Eye will make the whole world blind - Gandhi
I do not want to pay 4 cents to read a newspaper article. I'd feel like I was being nickled and dimed to death, and I most certainly do not want to make that damn spending decision 10 times a day. Paying 30 dollars for a game, on the other hand, can be handled by traditional means: credit cards, or for more advanced nations (non-USA), bank transfers.
If the word "micropayment" has come to mean a 1..5 cent payment for a small asset that used to be ad-supported, then shit, no, I do not want to enter that system. But imagine what kind of services could spring up if there was a way to effortlessly and securely pay sums, say, between 1 and 9 dollars! There are loads of intricate Java games and ameteur short videos that I'd be willing to pay a couple of bucks, if nothing else to offset the hosting cost. As it stands, all the data that might fit this Minipayment range are either free, with constant "please donate" and "we are having hosting difficulties" messages, or then they cost something like $20.
The bottom limit needs to be substantial enough to avoid the current micropayment mindset problems and the upper limit low enough to target this system to a new kind of use. The whole thing needs to be initiated by established monetary institutions, ie. banks. (Preferably not credit card companies.)
I remember this same sort of thinking when HotWired introduced the first banner ad. And yet, without banner ads, Slashdot probably wouldn't even exist. The question in my mind is: What great sites don't exist now, that could exist by using micropayments?
The net as a culture dealt with advertising, and we'll deal with micropayments, too. The sites that try to nickel-and-dime you to death will die the same death as the sites that spam you with endless pop-up windows, blinking banner ads, or shoshkeles. The equation is simple -- moneygrub your users too often and they'll flee in droves. Micropayment sellers will learn the lessons of the market, the same as anyone else.
He who refuses to do arithmetic is doomed to talk nonsense.
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
Will MicroPay for modpoints! Then, I will consolidates the numerous micropayments into one bill that will be split between the people who modded me.
"There is no teacher but the enemy."-Mazer Rackham
The even bigger obstacle to micropayments is the absurd notion that everything on the net is free. Paying even a nickel to listen to a song is an act of oppression. A band asking its fans to paypal a dollarto help cover the download costs for an album seems to create more indignation than dollars.
Unfortunately, the idea that everything must be free leads us to the less than desirable situation where only the politically connected or the idle rich will be in the position to provide high quality info on the net.
Say what? You think rich people take their change home and deposit it/count it/horde it?
Response was right was right - how is this tax free? How does this transfer any wealth/help the economy?
Please stop modding the parent - that is the silliest thing I have ever heard!
Also can you stop using social biggotted terms - refer to as "wealthy" not as "rich". I am rich, I am not wealthy. I live a happy life with all that I can ask for and more. I make less than 30K a year!
To summarize, when the cost of clicking a link is only time (how long will it take to load that link on my 28.8 modem), its a relatively simple decision. When its both time and money, a judgement has to be made. Sure, for a penny a page, one might not worry about it, but nobody's going to make money on a penny a page, no matter what "they" say; that only works on click-rates the size of CNN, MSNBC, Slashdot, source-forge, etc. And even then, when they see "the bill", it'll be like getting their first credit card bill and having no idea just how much they "spent" online...then they'll be reconsidering each and every link and users don't want to do that.
Users surf or they don't. If you had to pay a per-minute charge for doing real surfing in the pacific ocean, you wouldn't surf, so (extending the metaphore) why would you do it at home? There's a reason AOL and all the other ISPs got rid of their traditional per-minute charges and people buy cell phone and long-distance plans with max minutes instead of per-minute charging; the variable at the end of the month isn't worth the hassle.
"But remember, most lynch mobs aren't this nice." (H.Simpson)
-- Joe
Let's look at some real-world examples:
- Take-a-penny trays
- All-you-can-eat buffets
- Free refills on non-alcholic drinks everywhere
- 6 packs, 12 packs, 24 packs (you don't just buy only as many bottles/cans as you want)
- Unlimited local calls on home phones
- 600-minute & 1200-minute cell phone plans
Maybe these aren't all completely relevant, but I just don't see paying a little bit for each click being of value to consumers. I see it as being a huge pain in the rear, even if it is all automated and trusted. (cough, Paypal, cough)I think the real problem is that much of the internet's content just isn't worth any money to us. We can get a lot of content for 50 cents per day from the local newspaper. We can get content faster from TV at no incremental cost (but arguably less convenience). The internet can be great, but I ain't paying for Slashdot. The Motley Fool already lost me when they went subscription; they just aren't worth it.
If most everything interesting went pay I think there would be enough people volunteering news/info sites and discussion boards that we could still get our free internet. We may have to move to a p2p distribution model since running a centralized site as busy as Slashdot, for example, costs a pretty penny in bandwidth.
Well - I think the main thing holding us back in the US is that all currency must have a popular president on it and we seem to be running short somehow and picking people like Susan B and what - Sacawogia now or some such? At least they look good in profile. We need a new fraction of a cent called the 'W' and even though it may take 50 transactions eventually the 'W' will make cents.
http://www.openp2p.com/pub/a/p2p/2000/12/19/microp ayments.html
Rich.
libguestfs - tools for accessing and modifying virtual machine disk images
Would you rather be pop-added to death or
nickel-and-dimed to death?
Fact is most sites have to have a revenue source.
If they aren't selling goods they gotta get money somehow.
Paying a 1/2 cent to read an article or a comic doesn't seem as bad to me like everyone makes it out to be.
Why the backlash against them here?
Actually, if you have ever taken an economics/political economy class or researched the issues you would find that liquidity is a very important factor in a strong economy. The more money moves around the more people make, and the better the economy does. If you give $1000 to a rich person it is likely that they will take that money and invest it in something, because they are not living between paychecks. People who have discresionary income tend to invest "found money" more than people who have none.
Visualize the world of wine
E-gold works wonders. Pay any weight of gold, silver, platinum or palladium, all backed in real life by metal. You own the real metal and a payment is just a transfer of ownership. You don't even have to pay by weight, you can say $100USD worth of e-gold.
Been running for years, working really well, the only thing is the slow adoption rate and the fees. When (or if) this reaches critical mass it will be the best of all the options.
This is how i pay for my hosting and brought my domain name, not no mention a few other things.
Remember, it takes 42 muscles to frown and only 4 to pull the trigger of a sniper rifle.
There are other obstacles on the net that get in the way of micropayments for content. For example:
/.ed articles from the WSJ.
If your web site requires micropayments, or subscription fees, then your content doesn't get indexed by the search engines. This means that you don't get the web traffic you desire.
Likewise, people will stop linking to your web site. You won't get slashdotted, etc.. Notice how you rarely see
The resistence to your work caused by asking for a micropayment is far greater than the pennies you gain.
Let's say you ask for a dime to read your novel. Well, in the wild and crazy world of the net, a enlightened Robin Hood will see the plight of all the people who want to read your novel without paying the dime, and publish it on a P2P server.
It may be feasible to have micropayments down to as little as a penny per transaction based on the infamous web bug. Don't let the name scare you! ;)
Geeky modern art T-shirts
1. Providers need money to survive.
2. Today, that money either comes from annoying popups or doesn't come at all.
3. With a micropayment solution, the popups are gone and the provider receives money. Everyone's happy.
They don't really even solve the provider problem. If I want to pay someone .1 cents per view, I just keep a counter. I check the counter at the end of the "payment cycle" and then use another normal service to pay for the amount owed.
Get rid of everything Micro and Soft: Buy Viagra and/or Linux
You had backwards economic lessons then. I guess you're saying money in the stock market doesn't help the economy. Actually, the more money "the blue collar has" the more is spent TRUE - but often spent on material items that spike the economy like blood sugar/diabetics. You subscribe to Clintonomics my friend. How about setting us up for another dotcom/false economy by teaching that trash!
The only people crying for micropayments are websites that produce "content" that's nearly worthless. If the content is worth something, people will make macropayments to subscribe. If the content is essentially worthless, consumers are not going to push to be charged an amount so small that they don't notice it until the end of the month, and deal with the password, account, and billing hassle of playing along.
If you're going to do that, you may as well tack on an ISP tax and create national grants for the weblog arts. It could be like all those cryptic fees tacked on to my phone bill that constitute half my monthly payment.
Oddly enough, it seems that the free market folks are the ones who insist most strongly that this has to exist. I think the market has spoken on micropayments.
Micropayments are often discussed from technical and commercial viewpoints, without considering social aspects.
The world's biggest information providers are, by and large, in first world countries with strong currencies. The most needy (as opposed to the biggest) consumers of this information are in third world countries with weak currencies.
Micropayments stand to put huge amounts of information beyond the reach of those who need it in the process of improving society, and quite often the content provides don't realise this (or worse, couldn't care). And it's not only the cost that is the issue; foreign exchange is a controlled commodity in many developing countries, requiring government approval to conduct such a transaction. The implications for free movement of information are enormous.
Equally disturbing is the impact that micropayments will have on the ability to find information. Search engines will have to negotiate with huge numbers content providers, and will probably charge for searches. Any content provider that does not have a relationship with a search engine will end up having their information cached (bypassing the payment system) or unindexed.
i-name =twylite [http://public.xdi.org/=twylite], see idcommons.net
I still believe that single penny transactions will revolutionize the net.
Whatever.
Next.
This is nothing to do with currencies, cost of transactions, is about companies that are able to consolidate payments into a larger bill so that transactions are POSSIBLE. The mobile phone companies are already doing this.
The big problem with Shirky's analysis is that he makes no distinction between payments of, say, half a cent, and payments of a dollar or more. And that's a major flaw in his argument.
In the real world, Shirky's argument translates to: "No one will buy a candy bar for 50 cents because they will be paralyzed by the user overhead." And, of course, we know this wrong. The candy industry (just to give an example) makes millions of dollars of profit a year selling 50 cent candy bars.
Likewise, there is a legitimate zone of value for digital content that falls between a dime and a couple bucks. 50 cents for an online comic you like, or for a song from a band you want to support, isn't any different than 50 cents for a candy bar.
Micropayments are just payments. And I think it'll be funny if, in a couple years, the artists and writers and bands who are making money off of micropayments can read Clay's article and have a good laugh.
He who refuses to do arithmetic is doomed to talk nonsense.
Option 3: systems set up reciprocal merchant accounts with eachother.
Why not? PaySite uses PayAlice. In order to give my two cents to PaySite, I have to give two cents to PayAlice. Fortunately, I have an account with PayBob -- and PayAlice has a merchant account with them. I simply use PayBob to give 2 cents to PayAlice, and PayAlice transparently passes it on to PaySite. This is an awfully large favor on the part of PayAlice -- but it's worth it, because through this alliance they've doubled the number of sites they can claim using their system.
This is a lot like the way open source operating systems work. Even though there's lots of competing systems, they interoperate, so you don't need to separately develop software for each one -- and it would never be in the interests of any but the largest to not interoperate.
You might say that, in the software world, we're looking at a competition between your option 1 and my option 3. Perhaps the same sort of situation will appear in micropayments?
The problem with Beenz was that it just sucked.
It wasn't a Micropayment system like Paypal (at least not as I understood it) where a user could keep a set amount of money to make small transactions. It was a reward system for looking at advertising. Collect enough Beenz and you could "purchase" fabulous prizes. But unfortunately, it was like Camel Bucks or saving Betty Crocker points: you had to have a gajillion Beenz before you could buy even the smallest item.
How does hex relate to halloween?
Uhm, putting money in the stock market doesn't necessarily help the economy. If people arent spending money on things all the money in the stock markets wont do a damn thing. Money filters up from the poor to the rich. When a poor person buys something, that is a profit for someone who is likely better off financially. And this is not "Clintonomics," anyways last I checked the economy was better off when Clinto was President anyways... Maybe if we take over a few more middle eastern countries we can change all that though.
E-gold and the half-a-dozen or so clones of that system work quite well, *if* you're dealing with a userbase which already have accounts.
(E-gold, for those who are unfamiliar, consists of 1,500 Kg of gold in various depositories, and a database for keeping track of who owns which fraction of that gold. As currency enters or leaves the system new gold is bought on the open market, or liquidated from the reserves: i.e. it's a real currency, just like the dollar used to be)
Payments are possible down to 0.3 of a cent, and the system has been around for years.
Given that this technology has been around for years and works exactly as a micropayment system should, this raises two questions about why it isn't everywhere:
1> Can a micropayment system work at all? Given this system has all of the necessary properties, and isn't used universally for micropayments, is the model just broken?
(actually: I just checked the E-gold system statistics and it looks like they moved 22000 transactions for less than 10 cents yesterday alone so perhaps that counts as a functioning micropayments system? But if it works just fine, what's limiting it's growth?
2> Is it possible that any micropayment system needs to be universal before it can be used? Even though there have been various past and current schemes which were technologically feasible, does it require a PayPal-sized entity to start offering micropayments before there is enough of a userbase to make it feasible to charge for things?
$0.02, no pun intended
This really isn't a troll, PayPal is not FDIC insured, and I have heard of many occasions where money is lost, and PayPal really does nothing to accomodate.
This could be one of the inherent problems with micropayments. Small amounts of money disappear, who cares? It isn't worthwhile for PayPal to investigate, and it isn't worthwhile for the victim to pursue any sort of action (being legal action, or time spent complaining to PayPal).
Where people either pay the full value or get for free say 40% of the time? How are they doing now?
Great, i finally get a decent bandwidth flat-rate connection after years and now i have to start paying for all the sites i goto. It might be a penny a page but thats just another thing that adds up and becomes a bill to pay every month, i thought we could just go on scamming the advertisng penney-per-click companies that think we actually look at their banner ads or pop ups (if u download them but set your browser not to display them then the ad company thinks your looking at their ad and everyones happy)
I think this will probably not help the web, people will be more inclined to make their sites less user friendly - ie split pages up even more so they can get extra clicks and charge more, and use proprietry formats and DRM to stop people stealing their pages and giving them away for free (and why will anyone bother circumnavigating it when they can just pay a penny).
It will lead to more scamming (i.e the old method of stealing a penny from everyones bank account, but with lower security)
This comment does not represent the views or opinions of the user.
I've been wondering about this since it opened... and I haven't had my account long enough to find out for myself. Maybe $0.99 isn't a micropayment, but it certainly is a minipayment.
I've been hearing for years that the cost of handling credit card payments makes it impractical to use it for purchases of less than about $10. So how does Apple do this?
Certainly a big appeal of the Music Store is that you pay only for what you use and are NOT saddled with an automatic $5.95 or $8.95 per month.
Do they batch them? Do they actually lose money on someone who only buys one song a month, and gamble that most users will buy more than that?
"How to Do Nothing," kids activities, back in print!
http://www.btclickandbuy.com/
It's OCT not HEX.
The New York State EZ-Pass toll transponder system, and probably many others, may not be a "micropayment" system but certainly occupies some kind of middle ground. They initially bill your credit card $15, which establishes $15 in your EZ-Pass account. Toll payments of $0.65, $1.15, etc. gradually reduce the amount; when the amount gets low, they hit your credit card automatically for another $15 "recharge."
So perhaps one of the things that's happening with micropayments is that these "credit card auto-recharge" accounts are serving some of the functions for which micropayments would otherwise be needed.
I'm not quite sure what happens when you terminate your EZ-Pass account; I assume they send you a check for $6.22 or whatever. I suppose that if I had thirty or forty of these accounts, it might get to be annoying having $500 or $1000 tied up in tiny, non-interest bearing, spendable-for-only-a-single-purpose accounts.
"How to Do Nothing," kids activities, back in print!
As far as I'm concerned, anything that ends with a Z when it should end with an S deserves to die a painful death. I hate that cute "we pretend we can't spell" crap. It's like the "Kiddie Korner" daycares. That shit is so farking annoying. It's right up there with "My (wtf-ever)." I don't want to do business with "My Simon" and I dont want to tell my dad to look in His My Documents for a file. I don't want to use "My Yahoo," I want to use everone else's. Am I the only one that hates the "cute-ing up" of the internet?
There is a company, Eludo, that does card-cd and scratch card based micropayment solutions, that you buy in shops using cash rather than over the web and credit. I think some of the european games companies and new media content providers are starting to use them. I did some work with them on a canceled project last year, if I remember correctly it was better easy going from a techie point of view.
I've been saying it for years, and I continue to be right. Micropayments don't solve a customer problem, they solve a provider problem. If you don't solve a customer problem, you don't have a success. Nobody wants to be nickle and dimed to death on the net. It's time to retire this monumentally dumb idea.
The customer problem to be solved is pretty clear: How can I buy some one-off thing on the Internet that has a small monetary value to me? Currently I can't really do that. Have you ever bought a newspaper or some chewing gum? Those are small transactions. No one forced you to buy them. Did you feel nickel-and-dimed to death?
This is just another "first post", and should be at (-1, offtopic). I read at 0 just so I don't see these kinds of comments!
If we could just get this working, we'd make so much money!!! Wait, why don't people like this? It would make us so much money!
Let's setup a payment system where you're nagged about every little thing we can think of... oh yeah, that's great. Ever driven down a toll road?
Things work when business start looking at things from the consumer's point of view, not the business's point of view. Hello Ipod/Itunes.
sheesh.
-=sig=-
I read on Slate a day or two ago that the top selling song on all the various pay-for-download sites totaled about 1500 downloads. Considering that those are far more mainstream releases than the legions of webcomics and small press things that are trying to use micropayments, I can't imagine that small things like penny payments will be very productive.
As with many plans to roll in money on the internet, I don't think that market penetration of the net itself has occurred to the point where that's viable. Online is still narrowly profitable. Micropayments may well be a good idea - but I think they're coming too soon here. Try again in five years.
Philip Sandifer's academic website
I am a seller on BITPASS.
I think its great. I sell my stories and novels there for a dime or more. I have been doing it for a week, and already have had an amazing amount of sales.
Seems to work for me, when nothing else I have tried ever worked before.
Forget the honor system or begging for donations. Micropayments just works.
Roger Born
Writer, Teacher, General Troublemaker
rogerborngraphics.com
If i can. Even/especially if im paying for the bill by credit card.
All Troll + "offtopic" mods are meta moderated as "Unfair", because you abused the system.
The point being that micropayments are _not_ a technical problem but a cultural one. Credit cards are not technically sophisticated but they are widespread. You imagine it's hard to replicate a payments network that does exactly what credit cards do? Easy technically, very hard for business reasons.
The real cost of collecting credit card payments is very close to zero, and there are many ways of reducing this still further (e.g. collecting many micropayments into larger chunks for settlement). This is not the issue: the will of financial institutions and governments is.
It's like security: the technical aspects all well and good, but social and business aspects are significantly harder to solve.
Ceci n'est pas une signature
Micropayments are worthless if I cannot pay half the people... and since PayPal does not even support my country, that includes me.
I created my PayPal account, and it allowed a user with my country. But then I tried to add my billing and credit card info, it did not have my country suddenly!
The problem is that I cannot seem to delete the half-created account from Paypal, and they keep spamming me!
That is why I gave up on micropayments... mostly because of the incompetency of PayPal.
PayPal is possibly good if it works for you... but I would not know.
Like cubic feet of natural gas, or amps of electricity, or whatever. Miles of toll highway.
But I can't think of many things on the internet that I'd care to be nickled and dimed to death for.
On the one hand, there's a faction trying to eliminate the penny in the US because it's nearly worthless (nothing costs <$0.05 anymore). On the other hand, people are trying to figure out how to charge micropayments on the net. Aren't these opposite approaches to the same problem?
It seems to me that when a commodity gets cheap enough, people are willing to pay a flat fee for nearly unlimited usage. The most obvious example is phone service. Do you think people will ever really want to spend their money in tiny increments? I don't.
. . . of blue jumpsuited Flooz people standing at my subway stop, screaming, "Flooz is money! Have some Flooz!" Okay, not the weirdest e-marketing promotion, but still . . . It did not inspire confidence.
Monster Zero is the reason we cannot live on the surface, but must live forever live underground like this.
At my local(San Diego) kinkos I can use a credit card at the copier. You simply insert the card in the card reader and make the copies. I recently made 60cents worth of purchases and when I got my bill(AMEX)it was truly 60cents. Obviously kinkos has worked something out with the major card companies or they are just eating the fees on low end purchases.
how about i'll write this software so you can send me your credit card number and put it in a pool of other numbers,then,we just skim off the top of everybodys card so we can all enjoy the benefits of distributed payment.The more people who send me,Al Franken,their credit card numbers,the cheaper it will be for all of us,especially me, Al Franken.
(this advertisement brought to you by the Democratic party)
*Repent!Quit Your Job!Slack Off!The World Ends Tomorrow and You May Die!
Whatever Happened to Micropayments? Easy: micro-profits
3. With a micropayment solution, the popups are gone and the provider receives money. Everyone's happy.
Well no. Instead of porn popups people get "this web page will cost you a nickle to view, click here to shuck out some cash". That's no improvement. Besides, the popup problem is easy enough to solve without micropayments.
I can't imagine you would be willing to suggest that micropayments be silently transferred without user interaction.
Related to the conflicting messages ("you must decide to pay" and "this is so cheap it's nearly worthless") is people's perception of the value of arbitrary length strings of 1s and 0s. For a lot of people, digital data is not regarded as "real". It's not a material object that you can hold, fold, spindle, or mutilate; so it's not something that has value. Paying anything at all for it seems a bit much. Also, even if it is only pennies, most people will not accept the hassle of paying for things they can get free elsewhere. I can pay $0.99 for a song or nothing. Guess which I'll go for...
---- Hey now, hey now now, sing this kuro5hin to me
It all started with David Chaum's DigiCash and it was very promising. The patents and the technology however are owned by InfoSpace today and are collecting dust. The Blind Signature patent will become available soon, though, and somebody might pick it up. Then there was CyberCash (with Cybercoin), and they went belly up. Then there was Millicent, they died, too. Amir Herzberg (see here) used to be very active in the space but also gave up. Then there was Stefan Brands' system (see here) which never really saw the light in an implementation. Stefan used to work at DigiCash with Chaum (but they did not really mix) and then moved on to ZeroKnowledge where he left from a couple of years ago. This is just a brief recollection of things, I am sure I missed a lot, but they all failed. And this should tell us something ...
Have you ever bought a newspaper or some chewing gum? Those are small transactions. No one forced you to buy them. Did you feel nickel-and-dimed to death?
Bad analogy. You don't buy gum every few minutes.
A better analogy would be changing the funding structure for highways and roads. Instead of taxes, the funding would come from toll booths erected at every turn in town and every couple of miles on the highway. Would you feel annoyed and "nickle and dimed to death"? I would.
<GROAN />
"Obviously, I'm not an IBM computer any more than I'm an ashtray" (Bob Dylan)
On the good part: the control of the contents is in the hands of the clients, not the sponsors. Better content will win. They liberate us of the danger of bad subscriptions... lots of times one can tell whether the site sucks or not in a couple of clicks, and what now would be a US$20 subscription could be a couple of micropayments. They also would liberate us of the "subscriber-only" links that appear around here :)
But: nice to see how you manage to get the transaction overhead below the US$0.01, although this can be done with "virtual credit accounts". And while supporters can argue that we already use micropayments, like for water and electricity, there's a little detail that gets no airtime: most of the things that work on micropayments are monopolies or cartels. Remember dial-up internet? Pay as you use? Once flat-fee came into the block, pay per use went out fast... as the flat-fee guy rakes in the money.
Other issue that can be seen with micropaymentes is the fact that they clutter our surfing experience. There is, your previously unencumbered surfing now is awash with little transactions. Plus the confusion factor: the idea is to embed the micropayments into the links, so that it is automatic. So, you have this link that a) has you assess if it's worth to click that link and at the same time b) tells you it costs so little that it's nothing.
This working scheme that tries to save everything *but* the user's time doesn't sound so hot to me. Add to that de aggregation/disaggregation of products: is the newspaper worth a buck? is each article worth five cents? and so on... the pricing isn't clear anymore, when you had your newspaper for a dollar.
So, in my opinion, while having control of content in the hands of the customers and getting rid of subscriptions is fine, I think there's a lot to be fixed in the current schema of micropayments...
billing has always been a Big Deal for them, and they have been adapting to customer demand for flat rate in some cases (but not all).
bell labs used to employ economists and psychologists and periodically re-addressed the issues of billing.
TPC managements have been clueless about the internet from the beginning, though. quite a shame.
micropayments aren't going to fly, unless there's a cross-vendor api that allows me to choose my own micropayment gateway and not be limited to only -their- micropayment customers. and that isn't likely unless the treasury gets involved. (you can give me a call at my mars cottage when they get around to that)
what content sites -should- do instead, is let people charge up a site-specific 'meter', with say, $5. and as they view content, you deduct micropayments from the script total. when they hit 0, you either bring the ads back for that user or prompt em for more dough.
alternately, sites could just use the street performer protocol. seems to work just fine for every worthy webcomic to date. if not enough people buy t-shirts and prints and collectibles, you close up shop and go somewhere else, or try again (perhaps in a different format).
no need for pvp or penny-arcade or homestarrunner to go to micropayments. sites less dedicated to merchandising can stick with metered subscriptions. everyone wins. (except the micropayment banks)
its just easier for everyone involved if you ask me. plus, there's no additional costs/worries/security issues that you'd get with micropayment banks charging fees, going under, getting hacked, etc, etc, etc
// "Can't clowns and pirates just -try- to get along?"
Only Consumers want Micro Payments.
Banks and Vendors are content to stay with Macro Payments. Why would they want to make it easier for you to be a cheapskate? 'cmon! Whip out that credit card and charge up at least $5.
These are my friends, See how they glisten. See this one shine, how he smiles in the light.
When you contest payment with your bank, what happens? Well, you talk to an actual live human being, who will do actual human things, and make a decision on whether to refund you the money and whether to prosecute a third party. And your transaction fees pay his salary.
What happens when you contest something with PayPal? You drop them an email (good luck trying to talk to anyone), and then they freeze your account, sieze (i.e. spend) your money, and (if they're feeling particularly communicative) tell you to go screw yourself. They do that not because they're evil (although they probably are) but because they simply don't make enough margin on their transactions to be able to afford to investigate them, and because they know that it's not worth anyone's time to sue them, even in small claims court, for the contested amounts.
Now, when the transaction value drops to 1 cent, what's the best case margin on that? You've got purchase and maintenance costs on your servers and database, plus bandwidth costs for those 128bit SSL encrypted transaction details that fly both ways. Half a cent? More if you handle a lot. A loss if you don't handle enough to amortize your setup costs.
Now, how many fraudulent transactions do you have to have - from a single source - before it's worth taking any action? It costs ten cents for a staffer to click on a button, so you're talking twenty transactions. If the staffer has to think at all, it's a hundred. If they have to do any investigatation at all - for example, to decide if a bunch of transactions are from a single source - it's thousands. If you want to hand it over to a lawyer or other third party, it's tens or hundreds of thousands.
But that's fantasy land, because it's not worth even recording the details of the transaction that would allow you to decide if it was fraudulent or not. The logs themslves would take a huge chunk out of your profit. You'd simply have to trust the referrer.
Well, that's not working out too well for credit cards right now, but at least cc issuers can pass back all the costs to online retailers for credit card fraud.
But if it's not worth your while even retaining transaction records for micropayments, or to investigate fraud after the fact, how are you going to protect themselves from fraud?
I suspect that you're not. It comes down to the equation of whether it's worth anyone's time to crack the system. Well, as thousands of open source projects, white hat hobbyist hackers, and karma systems show, lots of people don't put a dollar value on their time. And given that the chances of being caught are minimal, well, why not give it a go? After all, it's only avoiding a penny a time. Who can that hurt?
Any popular micropayment system will (I suggest) be defrauded, and the costs will come right out of the payment backer's pocket. We've seen how PayPal deals with that; ignore it. Don't answer the 'phones. Freeze the account, and spend the money in it. With micropayments, who's going to even bother complaining? And if they do, how much are they going to have in their account? $5? It's barely even worthwhile seizing that, and not worthwhile at all if you have to send or even read a letter.
There is simply no compelling reason for anyone to manage micropayments, other than as a tool of desperation to prop up a flagging or non-existent business model (*cough* slashdot *cough*). There's precious little profit to be made from it, and a lot of opportunity to be scammed so badly that you won't even realise that you're bankrupt until you total the figures at the end of the year and find out that most of your payments came from Mr M. Mouse.
I suspect that it's good old fashioned economics that are stopping any of the big financial institutions from implementing mi
If you were blocking sigs, you wouldn't have to read this.
July 21, 2003
Developing Systems of Online Payment
By BOB TEDESCHI
FEW start-up Internet companies are taking on a problem that goes back to the earliest days of online commerce ? micropayments. Like others before them, they hope their solutions will crack open an online piñata of pennies and dimes.
The idea is to enable customers to pay pennies for digital content ? to read a story on the Web, for example ? and to help online merchants collect small fees while still making a profit.
But no company has been able to create for very low-priced items an effective online payment system that is worth the time and bother.
In theory, such a system would get around the problem created by credit card companies, the primary payment vehicles for online goods and services. Those companies, by charging roughly 25 cents per online transaction, according to industry executives, turn a dime sale into a money-loser.
In past years, start-up companies have offered various solutions to the problem. Among the most common were approaches that allowed users to pay for an account worth, say, $10, that they could then draw down as they bought items in penny increments.
But those companies failed miserably before and during the Internet's boom years because online content producers were flush with money and did not want to risk alienating customers by charging penny fees. And consumers balked at the inconvenience of registering personal information, downloading software or buying something like a debit card ? all to pay a dime to read a story.
Still, the idea that micropayments are an untapped source of online wealth stayed alive.
In recent weeks, two micropayment companies, BitPass, based in Palo Alto, Calif., and Peppercoin, based in Waltham, Mass., have rolled out test versions of their services. Both are championed by well-known technology pioneers, and both have already attracted attention from investors, merchants and some customers.
BitPass was founded late last year by two Stanford University doctoral candidates, Kurt Huang and Gyuchang Jun. Their idea is based on the familiar debit card concept, where consumers buy "virtual cards" in specific denominations and shop at merchants who accept the BitPass card. When the customer wants to buy an item on an BitPass-enabled Web site, he or she need only give an e-mail address and a BitPass password, and the purchase is done. BitPass earns a commission of up to 15 percent on each sale.
The concept is not new, but Mr. Huang says BitPass's advanced technology is simpler for both consumers and merchants than anything previously on the market. In the past, Mr. Huang said, micropayment services required customers either to go through a lengthy registration process or download software. Merchants, meanwhile, would frequently be asked to invest thousands of dollars and many hours to set up the system.
With Bitpass, customers who find a magazine article or a song worth buying are prompted to sign up for the service with a credit card on a window that opens from the merchant's site, rather than having to click to the Bitpass site. BitPass merchants can set up the service on their sites in less than a half hour, according to the company, with no set-up costs.
Mr. Huang and Mr. Jun pitched their idea to Guy Kawasaki, a venture capitalist, last fall and received his financial support. They have also sought prominent Internet merchants to help them build credibility, and focused on Scott McCloud, a writer and comic strip artist known in technology circles as the author of "Understanding Comics," an influential book on comics and visual communication.
Mr. McCloud said in an interview that he had for the past eight years written about micropayment companies and their implications for online artists. "So every time a company came along saying they'd made micropayments practical, they'd call me," he said. "Every time there was some flaw."
When the BitPass founders showed him their plan, he
Besides, the popup problem is easy enough to solve without micropayments.
I can't imagine you're suggesting a solution that deprives the content providers of their only income.
I can't imagine you would be willing to suggest that micropayments be silently transferred without user interaction.
That's certainly an option. Of course there'd have to be some kind of way of setting limits to the amount of money to be paid, for example a maximum of $0.1 / minute without asking the user.
There could also be some simple way of regretting a purchase, making it in practice a donation.
Yes, but phone companies usually have a monopoly of the phone market, so they can torture us with this "micropayment" and get away with it, because it is very rare the place where enough companies can provide telephone infrastructure.
e-gold has been around for a for a long time and the minimum transaction cost is less than a cent. Why can't it be used for micropayments?
Who is going to pay for viewing webpages? If I read a webpage, you going to refund me my money? It's only $0.01 or $0.10 or perhaps only $0.005, but it's still money.
Let me get this straight with common surfing that I do.
Surf to Google News. Pay to enter, pay per news story. Hrmmm, something interesting here.
Go to Google Search. Pay to search for more info on the news story stuff. Hey, here's something off-topic, but looks interesting! Pay more to search on that.
Ok, found a bunch of pages. Pay to surf to each one, however, 90% of them are useless.
Over to Slashdot. Pay to surf per story in there.
Over to Zap2it.com to view a TV guide. Pay for that. Let's mosey on over to a listing of movies, what looks good to see? Oh, there's more payments.
Let's check email. 20 messages, get charged for each one, plus replies.
In the meantime I'm being nickel and dimed for everything I try to view or do. What should cost me $40/month now costs much more.
I pay a fee for my internet connection. This allows me email and surfing and gaming capabilities. Why should I have to pay more money to others? If someone puts info on the internet and then expects me to pay for it, well, I'm not that customer. Even if it's Slashdot, probably my most read page, the moment it is subscriber only, I'm outta here.
Don't get me wrong, there's nothing wrong if someone feels that they should charge for their content, it's their choice. However, I won't be a "customer" of theirs and I would think many others wouldn't either.
It's really depressing, I've been using Internet and it's precursors since 1985 for a variety of reasons, and I remember a time when it was all open and free for use. No pop-ups, no spam, no discussions about how to charge people money for everything they click on.
Vip
I really don't know for sure, but I do have a theory.
First of all, when you deal with credit card companies, you have to get a deal with what's called a third party transaction processor. That's someone who actually handles authorizing the cards for you and getting your money from the cards into the bank. They charge you transaction fees based on each sale and certain agreed upon terms.
Each agreement is different. Therefore, to make a long story short, its quite possible Apple negotiated good terms with a third party transaction processor in order to make smaller transactions more profitable.
Its also possible that the average music store browser buys at least $10 worth of tracks every time they go there.
"All great wisdom is contained in .signature files"
E-gold and Goldmoney are almost infinitely splittable. E-gold, denominated in ounces, lets you put six digits to the right of the decimal. That's three hundredths of a cent.
French ISP Wanadoo yet provides a micropaiment system called W-HA, which allows every merchant to sell content and services to the customers of this ISP. Amounts go from 1 to 10 euros, and are added to the customers' bill.
:)
A good idea I think...as customers don't event think they pay
____
nico
Nico-Live
But rather than waffle about it further, I'll provide a few links. Cringely spoke about micropayments some time ago ("Let's Get Small", "Paying the Piper"), and I wrote to him about the former, gaining a mention in the latter -- he thought that my observation about voluntary payments was particularly insightful. I document that correspondence in an article on my own website ("Fame and Money"), and I also wrote an essay critiquing a non-deterministic micropayment system by Ron Rivest ("Micropayments: Are Lotteries the Answer?") which ties in with the aforementioned bits.
proof, n. A demonstration that a conclusion is implied by certain premises and axioms.
Bad analogy. You don't buy gum every few minutes.
A better analogy would be changing the funding structure for highways and roads. Instead of taxes, the funding would come from toll booths erected at every turn in town and every couple of miles on the highway. Would you feel annoyed and "nickle and dimed to death"? I would.
Why is that a better analogy? You've simply described a case where micropayments might not work so well. We can't buy road usage on the free market. No one is proposing that micropayments are the best model for everything.
don't make me figure out prices and charge me for access, just let me set up a monthly account and easily give a tip if i like something. i.e. you put a "tip the author of this" selection under the right mousebutton/click n' hold menu. bonus points for making it work it work for mp3s, pdfs, web pages, /. posts or even listserv posts.
http://usprogressives.org/ - redesign democracy.
One more thing holding back micropayments: for anything that small--music, movie reviews, weather reports, stock quotes, cartoons--there is someone giving away the same thing (or nearly so) for free. Yahoo! gives away weather reports because they want traffic and name recognition. Ebert posts his movie reviews for free. I enjoy his reviews, but if he started charging for them, I'd stop reading. Everyone has their price. Penny Arcade, user Friendly, and Dilbert are loved by thousands, if not millions. How many PA fans would pay $.01 to read each day's strip? How many $.05? How many $.005? Everyone's going to get to their point where they say "Ah, skip it" and go somewhere else.
.bomb.
Stick with what we have now: instead of 1000 users paying $.10 every time they read a comic, just reach those 10 fans who will pay a buck. Like that BitPass site--I'm really gonna sign up with them so I can take my choice of 3 comics, 2 musicians, and some guy's PowerPoint slides? (OK, PDF, but whatever.) I'm sure someone else is saying something equally interesting somewhere else for free. If his viewpoint is truly valuable and unique (no offense Guy) then hook up with Gartner and sell it to CIOs for $1,000 a throw. Otherwise, I'll stick with CNet, Slashdot, whatever. Actually, yeah, let's take a look at what he has to offer:
The most important lessons that Guy has learned thru his long and checkered business career.--Those stories are everywhere for free, even moreso after
Tactical tips to raising money in the most difficult of times.--I recommend a google search for 'VC blog'
Guy's fearless predictions about the Next Big Thing in Silicon Valley.--Cringely, Metcalfe, ad infiditum.
How to Drive Your Competition Crazy: A guerrilla manual to driving your competition up the wall. --Google: "guerilla marketing"
Lies of VCs --"vc lies"--Results 1 - 10 of about 60,500
Lies of Entrepreneurs--starting to see a pattern here?
Then and Now: Entrepreneurs $0.10 The differences for starting and running a business between then (1998 or so) and now (2003). --Jeez... *Lots* of people have time to write stuff like this... especially since about mid-2000.
(getting redundant, so I'll skip a few.)
War for Talent: Insights into the hiring and recruiting game.--I recommend JoelOnSoftware.com.
What is this guy (or anyone) saying that a million other people aren't saying for free? How do we know that this guy is *right*, and everone else isn't, and therefore worth--wait--ten cents?!? Wanna get your opinion out about business and make some money? Write a book like Iacocca. Otherwise, you'll learn the true meaning of "dime a dozen."
Dear Slashdot: next time you want to mess with the site, add a rich-text editor for comments.
The cost per transaction declines every year as improved banking infrastructure handles more transactions for the same cost. Going rate for a small business is $.25 + 2.5%. A business with a large number of transactions may be able to negotiate somewhat better terms. Apples cost per song to distribute is alomst certainly under $1 even including the transaction fee.
The Federal Reserve is not a commercial bank. It is a bank for other banks.
Visit me on #weirdness on the Galaxynet.
Social Security and IRS are not accounts in any meaningful sense to this discussion. SS is a monetary pool and the IRS is just another institution that you owe money too.
Do you really want the govt to start controlling loans and directly manipulating public interest rates? Maybe if there was a return to a gold standard you could make the argument, but with floating currency that doesn't work.
Also, don't appoligize for being an American, you pussy. Grow a pair for god's sake.
Yeah it was better off - people stealing venture capital - fraudulent businesses - shadey tax incentives - what tangible do we see today from the Clinton Presidency? All I know is I still don't know what the definition of "is" is!
Money filters up? What the ?#*&!
I run a medium-sized content website. I get between 4 and 5 million pageviews per month, about 10,000 unique visitors per day, and about 180,000 unique visitors per month.
I've figured out that if I could get each unique visitor to pay me just a nickel -- 5 cents -- per month, I could take down the banner advertising, quit my day job, and work on my site full time (and therefore make it that much better with more information).
Think about it. What if you had to pay content sites just $0.05 per month to access the content? Most internet users visit perhaps at most 100-200 different content sites per month. That would add just $10 to your monthly bill, and all advertising could be eliminated.
I would think that sites that are successful in selling you things -- like Amazon -- wouldn't charge you to enter, so that may even cut down on the number of sites you have to pay for each month.
With a price point of just $0.05, you wouldn't have to think to yourself, "gee, should I click on this link, do I really want to spend the money"?
I've tried various forms of banner advertising, sponsorships, commission links, etc., but I still can't earn close to $0.05 (on average) from each visitor (I'm at about $0.003 per unique).
I don't want to make my site into subcription-based, I'd rather keep it free, or free enough so that people could still easily view it.
Face it, the content on the internet has slowed down a lot since the dot-bomb. That's a direct result of there being no money in content publishing. It's closing up even further; one by one sites are becoming subscription-only. Pretty soon the internet is going to be one big magazine rack with the magazines all shrink-wrapped, and just a few free-zines in the corner.
Simply giving web publishers a few table scraps each month would dramatically revitalize what was once a very promising source of content and entertainment. Micropayemnts are one of the few ways that this can happen.
I beg to disagree. The only reason why the cost of clearing CC transactions is relatively high is that the business is so profitable. It is a pure circular logic: the companies that process credit card transactions spend (and waste) incredible amounts of money simply because they have it. Perhaps a better term would be 'marginal cost'. Given that banks and clearing houses have already spent their budgets on huge teams, massive installations and luxurious developments, the cost of one additional transaction is close to zero.
The end-user/business cost of such transactions is determined mainly by the market, and the US is notoriously uncompetitive.
In Europe we see direct debits being done for free and credit cards being used for tiny transactions, e.g. paying for parking.
Again: technical hurdles there are not. Willingness of the banks to sacrifice their 3% cut on trade is the biggest missing factor, feeble government support (not unrelated) is the second.
Ceci n'est pas une signature
That article uses a flawed argument.
I used to work for a dollar-store. Not as a cashier -- I ran the IT systems.
We found that the beauty of a dollar store is that the decision-making threshold is so low. If something is $1, you don't really have to decide if you really want it, and if it's worth $1 to you. After all, it's just a dollar, if you don't want the item you can just throw it away later.
The store relied on impulse buyers.
When we tried to introduce higher-priced merchandise, it was a complete failure. People just didn't buy the stuff, even though the deals were amazingly good. The people had to think too much, and the price being higher than $1 killed the impulse. Even $2 items didn't sell that well, even though those same items sold for $5+ in traditional stores.
If micropayments are very small -- either 1/10 of a cent per page, or 5-10 cents per site -- there will be very little decision making. The amount of damage you can do in a browsing session will be less than the cost of a cup of coffee, or a newspaper -- both things that people buy, use a little of, and then discard.
"In Europe we see direct debits being done for free"
No, it is not free. It costs your govt. That is why your economies are in the shitter. Even in America's weakened state it still crushed the puny EU.
We have the post office handle deposits, because they will be verifying everybody's identity anyways. Now we just need somebody to run the program. I propose Tom Ridge, because he has done a knock-up job with the Homeland Security thing. (Don't you feel safer, I Know I do). And we should have someone ensuring there is no fraud. I recommend Donald Rumsfield, he seems to be a very honest politician.
Wages are tax free when you take the cup of change at the end of the day and go spend it. Honestly, do you think Dunkin Donuts employees are reporting the change they collect? Be realistic here, nobody is going to report those earnings. It's remarkably easy to not report cash earnings, especially when it's relatively small amounts daily.
As for how it would differ from the way things work now, those people working the coffee shop get paid about $7/hr, which is not enough to live independently on. If they had more money to spend they would, whereas a lot of the customers make decent money, and therefore stash a bunch of it away from the day-to-day 'flow' of money.
"Sometimes, I think Trent just needs a cup of hot chocolate and a blankie." -Tori Amos on Nine Inch Nails
It's a better analogy because if micropayments were to become a pervasive way of financing web content, then you'd constantly be nagged for nickles or have them silently sucked out of your account until you have a giant surprise bill. Either way, it's a much closer analog to pervasive tolls than to the occasional pack of gum.
I can't imagine you're suggesting a solution that deprives the content providers of their only income.
If popups are their only source of income, they need to find another business model, go out of business, or deal with the fact that a certain percentage of their users won't see the popups.
I know, I know, micropayments are supposed to be the other business model but that won't work either. Slashdot has been agonizing over this for years. It's time to move on. The market has decided.
I see, you're advocating breaking the law (tax evasion) and you also have no respect for the ethics of the working class.
Speak to Red Foxx or Willie Nelson about those "cash transactions"
That scenario seems pretty unlikely precisely because people would find it annoying. It's not easy to sell stuff. People don't like handing over money unless they feel they are getting something of equal or greater value in return. You can't just slap a price tag -- even a tiny one -- on any old piece of crap and expect that people will buy it. They don't have to buy if they don't want to. If they are nagged for a payment every few minutes or otherwise annoyed, then they will go elsewhere!
Instead the HTML One-Way links, dead links, leeches, and no accountability system started. And it started ONLY because Xanadu was closed, secret system then (80's-early 90's), and HTTP/HTML was Public, known system.
AND because the people with the management's ear "rabidly prototyped" rather than designing and staying focussed on getting a product out, and pushed aside those in the project who asked them hard questions.
So they pushed the problems around from module to module rather than solving them. And they gave a presentation to the backers about "throway code" and how you only keep about 5-10% of the code in each pass through the loop. And this inability to undestand that a product is supposed to come out after a couple passes ("Q", not "O") ticked off their backers, who eventually backed out and left them back in the garage.
Xanadu had some good solutions - which is good, because they were trying to solve ALL the problems at once. But its "architects" never picked one and settled on it, so the rest of the crew could actually work on it (and not see their work discarded before it could even be finished).
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
The only entities in any position to implement one are the banks and credit card companies who have no incentive to do so! Why would they make a system where they would make less money per transaction than they are currently?
The one thing that the Internet has really brought to light for me is the awsome power of the status quo. Just look at the RIAA/MPAA.
Competition Good, Monopoly Bad.
I still don't get how it works. Their FAQ is really general. It says that they actually only process 1 in 10 payments (which means to me that they group them together before they process them). But I don't see how they can group them together except by each individual consumer. So does that mean that as a consumer, if I buy a nickel worth of something, I might not actually see it show up on my credit card for months? I wouldn't like that.
skkkoooonnnggggkkk ptui
..I would, but I just ran out of points. ;)
I am a viral sig. Please copy me and help me spread. Thank you
I already paid, the content providers need to talk to the ISP's and the ones collecting everything and demand a cut, or block access to certain domains. This is like HBO coming to me and asking for money the day after I pay my cable bill. Not that I don't pay for a few sites, but those are very specific, and I'd consider those more akin to a donation.
errr....umm...*whooosh* *whoosh* Is this thing on ?
is http://www.pico-pay.com
I couldn't care less about the size of the payments I can make,
.sig
it's that $0.35 per transaction + 2% that's killing me.
Anonymity and security is nice, but I prefer cheap.
-- this is not a
i don't see what this has to do with my point.
by necessity, they have to be able to account for and bill for very small charges.
it's been a while since telcos had regulated "profit", so they have of late been motivated to make this function cheaper.
but they're just too slow and stupid to figure out how to do this with internetworking - for which i imagine other companies would OEM if it were cheap enough. sort of like amazon hosting storefronts for businesses all the way up to borders.
The problem with current micropayments is that they insist on making each payment into a financial transaction. I view an article for 3 cents, and they reel off a whole bag of accounting mumbo jumbo and all the other usual stuff that goes on with a financial transaction.
To be cost-effective, micropayments should be more like poker chips (albeit microscopic poker chips) - you pay for a set of chips, use them to do your business, and no actual money changes hands until amounts accumulate to a certain level and/or certain time intervals have passed. For example, let's say they use a system of "points", where 10 points cost 1 cent and points are sold in increments of $10. So you buy 20,000 points with your credit card or by sending a check to the "microbank".
Then when you purchase something, points are deducted from your account. Each purchase should not be processed as a financial transaction, just as each megabyte transferred from your web site is not made into a billable transaction; your hosting service just bills you at the end of the month for the total megs and gigs transferred. At some interval, the merchants and different microbanks settle their cumulative bills (merchants with too small of a points balance wouldn't get any cash yet).
If you want your money back, you can ask for a check and they send you one based on the points you have, after deducting a check processing fee (which could be bigger than the value of your points, so you'll have to just leave them there).
They also should have a provision that one person can use to send points to another. If the individuals want to exchange money for that (ie sell their points), it's up to them how they're going to transfer the cash.
Still, this would not work for someone who wants to buy just 10 cents worth of something and nothing else ever again. I don't think any system could be cost-effective for that kind of use, just as it would not be cost-effective for you or the phone company to bill you proportionately for just two local phone calls per month.
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There is inferior bacteria on the interior of your posterior.
Yes, Free! Pico-Pay is a system where advertisers fork out the money, not web users. Content is given a price, for example, .10c, the web-user is then presented with a popup that will present a list of ads (and how long they go for) that the web user can look at to get the credit they need. Once you have the credit, the content is yours, all for free!
Pico-Pay also offers to free accounts for opensource projects to have tip jars!
Check it out here
There are already TWO viable online payment systems that support extremely cheap micropayments: e-gold and Pecunix.com . E-Gold does on average USD $2.5 million per DAY in transactions, and 65% of them are for LESS THAN ONE DOLLAR!!! Check the stats for yourself on the stats page. Also, for an in-depth article on digital currency transaction systems that currently support cheap micropayments check out this article at www.goldeconomy.com.
Most of my transactions are bigger than micro but not all.
Anyway to show one good use of micropayments I will pay the first 10 people to mod me up, advise me of your e-gold account number (and if you have 1mdc the initials for the account), allow me time to pay you, I am working and on the road.
Here is a freebie to get you started...
I have another interest in anonymous money, but that is another subject, if interested google should show my interests or if your even slacker, email me.
This is my sig, exciting huh!
If you want to build in a callback for dispute
then you cannot do micropayments because
the police costs are too high.
E-Z Pass is not micropayment. It tracks everything
and ties to your whole CAPS II and terrorist
profile. Good morning Number 2. We know
where you buy your hamburgers.
I would dearly love digital cash. Sometimes
I want to be anonymous. I want the transaction
done and never to return because the police
costs themselves make the transaction not
worthwhile.
And as a matter of course I do not want to
leave a trail; that is my business, not my
bank's business, not Ashcroft's business. Nor
do I want RFID tags in my tires or an E-Z pass
transponder feeding my digital persona to
everyone I pass.
$.79, or $0.79, is seventy-nine cents.
Enby in Waltham
<nbodley{at]theworld{dot]com>
Isn't it against the interests of existing credit card companies for the model to change at all?
One reason the micropayment idea doesn't work with the current CC's is that the tax paid to the handlers becomes an inordinately high proportion of the payment when payment itself is small ( $1 ).
If the micropayment idea takes off, won't it pressure the CC monopoly to reduce its tax, thus undercutting their high profits?