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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.
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.
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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!
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Uh... no. 15% is very fair, as compared to $500/mo. account fees, $0.07/transaction, and 3.5% fees. Really, when you look at it, for a one-cent fee, paying $0.07 per transaction is f***ing insane, so I appriciate the reduced fees.
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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....
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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.
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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'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. :)
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...
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