Slashdot Mirror
BitPass: Micropayment That Seems To Work
Omega1045 writes "I have been following the story of BitPass for some time now. The micropayment solution provider has been featured on Slashdot before. That article focused on Scott McCloud, and his comic The Right Number. Since that story, BitPass has added a number of sites using their service. From this netizen, it looks like the idea is really taking off. Some news sources (NJ.com, SiliconValley.com) have noticed how this micropayment trend has progressed to include well known services like iTunes. I really like the idea of the artist getting a fair cut of the profits at BitPass."
It doesn't fix the fact that most people don't want to pay for internet content in any way, shape or form. Case in point- IGN. Even though that was subscription based, it's complete "collapse" as it were was caused by moving to the pay model. Fileplanet is having the same types of troubles, as their "exclusive" downloads quickly become not so exclusive. People aren't ready to move beyond advertiser supported web content in droves. It's too early.
"For items priced $0.01-$5.00, the transaction fee is 15%."
15%! Are they crazy?
If there is chasm of quality between paid content and free content (like national subventioned tv and cable tv where I live) then people will go for the highiest quality because they have the feeling they get something for their money (I take the tv example as it is what comes as near in mater of content as of web). But if somebody is Offering the same or equivalent conent at same or acceptably same quality then people will not go to pay for service. This is especially true if the free content is in a greater mass than paid content.
The tendence might invert itself. But it will take a lot of time. And I even think maybe never because they will always be a drove of talended people making something for free.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
can be found at www.kopek.net
You really don't know the true scale of business in this country, do you?
All micropayments this year don't equal what Warren Buffet loses in the wash each week.
Since the moderators, instead of simply leaving some happy comments alone are nailing me, I will add something very much on-topic.
I think "home grown" service like BitPass are just the key for up and coming artists. Offering a service at such a small amount of money is very marketable. This is possible for the artist because the they gets such a large portion of that take. On an average CD, the artist makes much less than a dollar. That is a very small percentage @ $12 to $15 for a new cd!
Imagine a YOUNG Metallica level artist on their way up. Instead of using traditional means, they offer their LP at $2, on BitPass via MP3. They make much more per album than they would through traditional means. They don't have to sell near as many albums to be a huge financial success, and continue to make their music or whatever.
Sounds like success to me! I can think of a few local bands that I wish were still around, but simply could not afford it. A succesful BitPass style service could have really helped them!
Great ideas often receive violent opposition from mediocre minds. - Albert Einstein
-Trillian
Even if it doesn't succeed, it lays the ground work for ideas to spawn off that might lead to something better later on. On the net there is a culture of take what you want. Open source works well with this, but economics based on scarcity does not. Thus leading to piracy. If piracy is reduced it's still a step forward.
Funnyhacks - Wierd, unusual, and fun hacks
I can't believe micro-payments will ever catch on. Will we all be teased with only first 2 sentences of an article, and then have to cough up $0.02 for the rest? $0.01 for the first 10 search results, and $0.01 for every 100 results after that? $0.01 to view the FAQ section of technicial support, $0.02 to search the FAQ for a keyword. Hell I could rack up a $50 tab in an hour of surfing.
We initially volunteered for the trial, but didn't bother once we heard of the terms- basically, 15%, same as paypal. Our users would have objected to keeping a balance they couldn't use anywhere else. Worse, we'd loose ANOTHER 15% because they(at the time) only supported PayPal for transferring funds. Worse, they only do the transfer when it gets to a certain size. Micropayments, macrotransfers, mean that not only are they ripping you a new one on the 15% fee, but they're ALSO getting your interest.
Call me silly and slap me stupid, but the point of micropayments was to make small payments economically viable. I don't call "three times a credit card processing fee" viable for what amounts to nothing more than a proxy service.
All Bitpass does is play "mini paypal", and that's neither original nor novel. Next, please. That technology involving random numbers+statistics looked far more promising....
Please help metamoderate.
Company called Bee-Tokens.com has been a micropayment provider for over 3 years. they payout 80%, I don't know how bitpay can do 15% commission. chargebacks are a bitch, and credit companies want something like 5% on all non tangleable internet transactions, including server uptime etc. oh well, I have been using Bee-Tokens for a while, works for my photographs.
For items priced $0.01-$5.00, the transaction fee is 15%.
For items priced $5.00 and higher, the transaction fee is 5% + $0.50.
15% is one helluva chunk to take for being the clearinghouse for micropayments, and the over $5 fee is roughly twice what you'd pay through a US commercial gateway.
Stop-Prism.org: Opt Out of Surveillance
What I don't understand is how these companies can even exist? The credit card industry (in the US anyway) has been building itself up for years and years.
What I'm trying to ask is a two part question
1) These services are going to have to go through the same growth problems all new financial services go through. Not all new financial servers are viable economically, and it's possible that micropayments are not viable.
2) Why doesn't AMEX or Visa offer some sort of micropayment system? They've already got the basics for one right now: it's pervasive, easy to use, familer, and cost effective for many transactions. You just add an aggregator account for micropayments along with a dab of crypto and there you go: instant micropayments.[1]
-jbs
[1] the aggregator account would work like a till. Each micropayment get's tagged and signed by the payee's pubkey. At the end of the month, everybody get's paid and billed, just like they do now. The user can manage their micropayment wallet by adding/removing cash/credit (that way you can't just rob someone blind). The merchent get's the % taken out of the total of the aggregated account for processing fees. You could even use this on vending machines, cardswipe+pin and the charges get aggregated daily instead of monthly (all cryptocash emptied from this machine daily).
This is even weaker than Verisign's lower class of SSL certificate. Verisign at least requires a Dun and Bradstreet number.
There are far better seal programs, such as the classic Good Housekeeping Seal of Approval. That's an actual warranty. "If a product bearing the Seal proves to be defective within two years of purchase, Good Housekeeping will replace the product or refund the purchase price." "Entrust" doesn't come anywhere near that.
Then there's the question of whether BitPass is a payment service or a reseller. iBill, for example, is a reseller. When you buy something through iBill, the actual "merchant" is iBill, and if you want a refund, you can get it through iBill's customer service operation. Getting it back from the site operator is iBill's problem, which is why they take a big cut and hold back payments for weeks.
BitPass doesn't seem to be set up that way. BitPass is, in a sense, "selling money" That may create problems. Credit card issuers don't allow merchants to "sell money"; that's a loan, which comes under banking laws. Also, the U.S. Government has a monopoly on money. Casinos in Las Vegas used to take each other's chips, but that was ruled to be a "currency" years ago, and they had to stop.
Worse, the BitPass site does not disclose the name and address of the business before asking for a credit card number. They've set things up so it's hard to get a refund. They don't disclose their refund policy. That's a criminal offense in California (B&P code 17538), where BitPass apparently is located. That's good for six months in jail. Here's the law, which is very specific, so sleazy operators can't hide the required info and claim they comply.
(1) Before accepting any payment or processing any debit or credit charge or funds transfer, the vendor shall disclose to the buyer in writing or by electronic means of communication, such as e-mail or an on-screen notice, the vendor's return and refund policy, the legal name under which the business is conducted and, except as provided in paragraph (3), the complete street address from which the business is actually conducted.
(2) If the disclosure of the vendor's legal name and address information required by this subdivision is made by on-screen notice, all of the following shall apply:
(A) The disclosure of the legal name and address information shall appear on any of the following: (i) the first screen displayed when the vendor's electronic site is accessed, (ii) on the screen on which goods or services are first offered, (iii) on the screen on which a buyer may place the order for goods or services, (iv) on the screen on which the buyer may enter payment information, such as a credit card account number, or (v) for nonbrowser-based technologies, in a manner that gives the user a reasonable opportunity to review that information. The communication of that disclosure shall not be structured to be smaller or less legible than the text of the offer of the goods or services.
(3) The complete street address need not be disclosed as required by paragraph (1) if the vendor utilizes
Instead of the micropayment route, I've always preferred the idea of paying one monthly fee then getting unlimited content for that fee. It's like those "adult passes". You pay them a monthly fee, then when you visit a member page, they pay the page for you.
With a pay-per-view thing, I'd always be asking myself "do I REALLY want to see this, or can I live without it?" and end up missing a lot of stuff.
I have to say I agree with him on this. He makes several very good points about micropayments, free content, and how the Internet shifts the balance of power from publishers to consumers.
"And the meaning of words; when they cease to function; when will it start worrying you?"
I was surprised that this never got discussed on /., but there is a *very active* campaign going on in Holland to promote pre-paid cards for use on the Internet. It's called wallie, and at least we are interested to use it on our little web sale project.
"We can confirm that Debian does *not* ship the version with the trojan horse. Our version predates it." [CA-2002-28]
I'm seventeen. I wouldn't mind paying for stuff if its good, but there's always one thing I run into that I can't do anything about. I'm underaged, so I can't get a credit card. Internet payments would be its only use, so getting one to the family wouldn't be meaningful either. And when I become a poor student, no bank in their right mind will want to give me one either. Nor am I sure I want to even get one, with the trail it leaves behind.
Add to that that I'm not from the United States, and it all amounts to just too much trouble to go through for the possible benefits and warm-and-fuzzy-feeling. What I'd like to see are some sort of bitpass cards that anyone can buy from a store. Before that happens, micropayments won't work on that meaningfully. Internet users under eighteen aren't that far and inbetween, although I admit that most just play CS and no little else. :)
Why should I pay to stop spam when my filters have already caught all of it?
What we call folk wisdom is often no more than a kind of expedient stupidity.-Edward Abbey
What about the 'pay what you think it's worth' model. That's what I use on my London Blog. If people like my writing and want to help pay my school bills then they can drop a pound or two. This way everyone is happy, those who want free content can get it, and every once in a while I get some support from the people who enjoy my work the most.
There is a culture of ignorance among regular users that dictates that anything that costs money on the Internet is some sort of scam, so they avoid most of them. Not only that, but many are still very nervous about moving money online.
Among the geeks, however, many still think that actually *buying* things online makes you some sort of sellout. I have been made fun of before for buying shareware - since the person making fun of me had the same software but didn't have to pay $29.99 for it.
Until both groups (standard users and geeks) come to accept that it is quite ok to spend money for something online, we are going to continue to see resistance to these sorts of services.
-danielrm26
dmiessler.com -- grep understanding knowledge
Small sites usually do not control their own webservers and are hosted along with other sites.
What BitPass is asking is to install a 'gateway' to allow their service to work. They claim the service will thus work in 30 minutes. In the majority of cases, with small sites, there will however be extra hassle because of the way BitPass has to be installed.
It could even be impossible to install BitPass on cohosted sites, who knows ?
Ofcourse it's still a beta, but they got to do better than that...
Slashdot: stuff for news, nerds that matter, matter for news, stuff that nerd
whenever I go to a big shopping mall, I see people making music. They work according to the same model, even though they are not really earning much by it, and even though they use a hat-way instead of a BitPass way to get money. Some people are really interested in the music they make, and throw in some money.
There are people who, however, rather would like that only the stores were there in the mall. These people call in the local mall-security or the law-enforcement people, who make sure they are thrown out.
Now only the big stores are left. Why? Because they pay rent to be there.
You are not paying rent, or can't pay rent of the little money you earn, so you have no right to be there.
I hope that analogy will not have any place in the internet...
Slashdot: stuff for news, nerds that matter, matter for news, stuff that nerd
I recall when eSheep posted the new installment of Apocamon there was some small fee to access it tied to BitPass. The problem was that the cost to access the material was rather small, about $0.25 (a bit large for something I'll only have limited, temporary access to, but that's not the point here) however the user was required to make a minimum purchase of a $3 "virtual cash-card" from BitPass just to be able to spend that $0.25. Rather than functioning like PayPal where any amount can be sent and pulled back to your bank account BitPass requires you to toss in a set amount. Can't find someplace else to spend you $2.75? Well, looks like you just paid $3.00 (The current going rate for a comic book with 22 pages of story) for an online comic you have no physical access to and will lose the ability to read after 666 times or 30 days, whichever comes first.
The way that BitPass operates is thus the biggest problem here. As much as I chafe at having to purchase the latest installment (great, get me hooked on something free then wait forever to continue it and start charging) and the micropayments idea in general having my money locked up by one company is a problem. Even if there were multiple places accepting BitPass it would still be a bad idea unless they had a clear monopoly. Regardless of whether micropayments are good or bad, BitPass is a terrible implementation.
A short, but interesting read on the:
Logic & Viability of Micropayments
http://www.gammafrog.com/node/view/2
you may have heard about the minitel, some sort of videotext terminal that iss distributed for free.. its nominal speed is 1200/75 bits/s, but you now have faster ways to access it. anyway it was sufficient for its semi-graphic interface.
the main use of the minitel was to connect to some "kiosk" and then type the name of the service you want to access. you don't have to subscribe, eventually you do not pay the services directly. you are billed by the operator (france telecom) according to the time you spent on the different service, and their respective rates (from free to something like 1.5 dollars per minute). the billing is made in the same invoice as the usual voice calls. the operator charges, collects the money, keeps some for himself, and give the remaining to the providers of the different services.
a lot of companies made a lot of money with this, with different kind of services: chats (some very sex-oriented), games, value-added professionnal databases..
minitel was launched in 1984, and it was very popular, years before most of us ever heard about internet:
http://www.ust.hk/~webiway/content/France/history. html
more than 6 million terminals were distributed as of 1994. more than a billion connections in 2002, not too bad for a 60 million ppl country and for a medium that is slowly fading away.
if you are curious you can even try it using your internet connection:
http://www.minitelfr.com/home/index.html
That was a funny PA -- quite clever, if you've read Reinventing Comics. However, I think Gabe & Tycho made real asses out of themselves in the accompanying commentary. They responded to McCloud's optimistic (if starry-eyed) willingness to imagine a bright future for cartooning and put out creative new ideas by basically, as he put it, kicking him in the teeth.
... Your responses were deft and had the weight of punishment, and I feel as though I have been taught a valuable lesson by a bloom of aluminum baseball bats. At the root of it, I misjudged the man. For his part, he says that he has not made himself as aware as he should of the way online comics are progressing - and the ways they are endeavoring to support themselves. ... My conversation with Scott was fascinating, and clarified many, many issues."
G&T are hilarious, but heavens, they do shoot their arrogant little mouths off sometimes. Micropayments may not work, and Scott McCloud may not be right about everything (or even anything), but (1) as a hard-working veteran artist who was drawing comics when the PA crew was in diapers, he deserved more respect than they gave him, (2) as a veteran embracing change, a creative mind trying to test out new, risky ideas, he deserved more respect than they gave him, and (3) as somebody who is -- hello! -- trying to figure how they can make a living from their craft, he deserved one heck of a lot more respect than they gave him.
They ended up eating a bit of crow over that comic -- mostly because McCloud himself responded by being persistently civil to them until they realized what a couple of assholes they were. But they did realize, and came back with the kind of civility their satire ought to have carrier from the beginning. Tycho: "Reader response to Friday's thingy was profoundly, powerfully negative (Which Scott even apologized for - can you believe that?)
I too was convinced after reading Shirky's essay. Then I read Scott McCloud's rebuttal, and I have to say it is quite convincing.
Information: "I want to be anthropomorphized"
Paypal is 2.2% + $0.30 USD to 2.9% + $0.30 USD. The higher rate is for foreign transactions.
Unless you have a personal account in which case it's free (but you can't take credit card payments). The only way BitPass beats PayPal is under $2.35 for a transaction. For a $5 transaction I pay about 41 cents to PayPal where I'd be charged 75 cents for BitPass.
I don't like micropayments and although I could save all of 19 cents in fees per $1 account, there's no way I'm going to use two on-line payment companies for my site. Especially since the next tier of my subscription is $4 in which case PayPal is cheaper. I charge for a time period of unlimited access. Not per file or other such garbage that people are attempting to do micropayments for.
I'm with Penny-Arcade on this one. If what you're selling isn't worth paying at least a dollar for, then don't sell it.
I'm not going to pay you a quarter to read your comic but if it's good I might pay you $5 to get access to all the old comics for a year.
A quarter is an annoyance. Five bucks is a real amount of money which people will pay for quality merchandise.
Ben
Work Safe Porn
I've been using BitPass to sell a number of things:
1. My feature film, "Nothing So Strange."
2. Open-source clips from that film.
3. Songs from "Bat Boy: The Musical."
4. My play, "Fair & Balanced."
With regard to some questions and comments here about BitPass:
--Ease of use. I didn't install the gateway, but I do most of the listing and configuring the pages to work with BitPass myself. I'm not much of a techie at all (which is why my hands are trembling slightly as I post on Slashdot) and I found the process easy from the start. The previous poster is right that the gateway installation complexity puts BitPass selling out of the hands of those who can't control what their host does, but I know that BitPass has specific plans to make becoming a BitPass seller much easier.
--Refunds. Getting a refund is actually quite easy. In the first days, some people had trouble downloading "Nothing So Strange." All they had to do was register a complaint at BitPass.com, then we read their note and either solved the problem or issued a refund. Often, this whole process was completed within minutes. (And we've fixed the majority of downloading problems now.)
--Are people willing to pay? God, yes. We've been dying to make "Nothing So Strange" (a faux documentary about the assassination of Bill Gates) available to all of the people who write in and ask how they can see it. So far, it has only been at festivals, so if you didn't live where it played a festival it was impossible to see. The demand we knew was there did translate into sales. Now, with any luck, we can use the proceeds from the online venture to finance a DVD run and make it available that way, too. Additionally, the most popular "Bat Boy" song download is the one recording that is available nowhere else--an early version of a song that is currently on the album in stores. To "Bat Boy" fanatics, an exclusive like this is pretty special. I agree with the poster who said that people won't pay for stuff they can get for free elsewhere on the Web. The trick is to have stuff that isn't anywhere else. Nothing I've put up on the Web with BitPass is something I would have put up for free--the bandwidth costs alone would have made that impossible.
--PayPal competition. As far as I know, PayPal doesn't offer secure access to online content. That's the key advantage of BitPass.
--High buy-in. It's true that to buy something for 25 cents you need to spend at least $3 if you are not currently holding a BitPass card, and that is a disadvantage. But as more and more content gets up on the Web using BitPass, I think this will be less of an issue. And the items that are already priced at $3 or $5 (like, oh, say, my play or "Nothing So Strange") will help put a BitPass card in people's hands without their risking anything.
--BitPass fees. To paraphrase another poster, you can see it as a 15% fee or an 85% royalty. I have no problems with their terms. For what they do, it's worth it.