Responses to Clay Shirky on Micropayments

FrnkMit writes "Others besides Slashdotters have responded to Clay Shirky's latest article on Micropayments, including long-time micropayment booster Scott McCloud and the MIT Technology Review."

Comments

The problem with standards...

[epsalon]

... is that there's so many to choose from. The problem is all these micropayment systems don't interconnect with eachother. If I were to sign up with BitPass, I would have to pay $3 even though I need it only for a purchase of $0.25 The same goes for any other micropayment system. I think micropayments should be handled in a decentralized way, all the way from your ISP bill to the target vendor, using so-called "micropayment banks" in the process.

Microfraud

[nacturation]

If micropayments ever become ubiquitous, I think we'll start seeing the old "salami slicing" hack again. When a lot of stuff you do online costs a nickel here, a penny there, a dime elsewhere... you can rack of some pretty serious numbers of transactions just browsing around. After all, if loading that New York Times article linked to from Slashdot is only 2 cents, who cares, right?

But perhaps some clever fraudster will see an opportunity here. Wouldn't it be easy to steal 1 cent a month from 1,000,000 people who use micropayments? After all, who's going to notice a line item titled "News article ----- $0.01"? So there's $10,000/month that nobody's really going to miss.

And for a single penny, would most people take the time to make a phone call or write an email to request clarification on where that charge originated? Even if all you make is a pitiful $3.60/hour, that one penny takes a mere 6 seconds to earn, far shorter than the time it would take to investigate. And is the micropayment company going to investigate your 1 cent dispute? Likely they would ignore you or even just automatically refund your penny without much thought.

Re:Microfraud

[Rogerborg]

Correct! I did the sums on this a while back, and at $0.01 per transaction, you don't have much room for things to go wrong. You need a lot of transactions to amortise your fixed costs, which means a few big micropayment services rather than many small ones. Once you figure a crack for one of the big payment services, you can cream it pretty much at will, because as you so rightly point out, the cost of investigating any given transaction vastly outweighs the cost of the transaction.

You'd need about 10,000 transactions from one source before it's worth taking action, but then the question becomes: how much do you spend to find and associate those 10,000 fraudulent transactions? The only real strategy is to ignore all but the most blatant and clumsy fraud, but then it's simply a question of whether you can cover your fixed costs while being bled slowly to death.

MIcropayments are based on trust, and that's in pretty short supply online.

Art IS a commodity

[Pflipp]

Being an "artist" myself, and even having vague plans at earning my money with this after my (unrelated) study, I'm afraid I must disagree with McCloud saying that art isn't a commodity.

Funny though that Dictionary.com has a rather interesting definition of the word "commodity" with relation to McCloud's comments, but I'm sure that McCloud tries to say that a commodity is "something that you can just take for granted".

We may not realize this, but our "modern" culture, like any other culture before it, relies on the availability of the art that underwrites it. Belonging to a culture is still something that is expressed through music, art, fashion and religion. People don't like restricted access to culture. Music, cartoons, whatever art it is that you like, it becomes part of your life, and part of your culture. (Striking example: how many `80's songs do you like to hear, while you agree at the same time that they suck -- just because you grew up in the `80's and you can share something with your friends through this music?)

Life, even in our Western world, would not be so nice if we all threw out our stereos, radios, comic strips, TV's, bioscopes, monuments and ALL other ways in which we access art, and thus culture.

Art is a gift to culture, and should thus be a gift to the people. Like anyone else, artists should make a living. They should definately find some way to calculate their hours of work into their products. But the art should be free for all of us willing to enjoy and extend it (bar stuff like trademarks that put some structure in the "development process" of our art).

Now get out there and start making business models again! ;-)