Slashdot Mirror
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.
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...
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,
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
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.
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'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.
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.
I think paying anything to recieve an email is an extremely bad idea, at least not without implementing some important features.
... eventually they'll have to pay to send their emails which of course will put a major dent into their business, but until there is no way at all that they can send bulk emails, people will not want to have to foot the bill of receiving emails they didn't want anyway.
You can't forget about the spammers
Now, if you DO want to charge for receiving emails, charge some sort of a flat rate, scaled slightly by bulk; if you recieve thousands of emails, your rate goes up. If you recieve a couple a week, the rate is a bare minimum. This would, again thinking about spam, require that the companies charging for email access use extremely good spam blocking systems, and provide a method of allowing users to quickly and simply report spam that slips through the cracks, perhaps an address to forward to, which is randomly checked by humans in order to prevent abuse. This way, it is entirely up to the user to deal with any spam that doesn't get blocked, and if they get charged for anything they didn't want then it is entirely their fault.
So, in order for a company to charge for incoming email and not start hemorrhaging customers, they will have to both offer a quality of service significantly better than 'free' services, and also provide a means for the user to not get economically raped by unsolicited email.
just my oversized $0.02
(imagine if it did cost $0.02 to post on slashdot.. wouldn't that be ironic?)
ìì!
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.
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.
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.