The March Towards Micropayments

MattW writes "It's been well over a year since Ron Rivest's company Peppercoin was introduced on Slashdot. Now, the AP is reporting that Peppercoin 2.0 is here. Peppercoin's website indicates that version 2.0 pays merchants exactly what they charged, instead of with cryptographically signed tokens which may or may not sum out to exactly the expected charges. This looks like the technology that will enable credit card acceptance in vending machines and video games, but may not solve the need for truly "micro" payments, like paying $.005 for a page view."

Comments

Re:Subscription-based websites

[bcrowell]

I may not be getting a FP here, but I do seem to be getting the FP by anyone who's read the article. The article isn't about subscription-based web sites, and it's not about paying for a page view. They examples they give are:

• buying music online
• paying to play video games

Both of those seem pretty reasonable to me. I have a bunch of Chucky Cheese coins sitting on a shelf -- it's a pretty inefficient system. And think about all those parents who would rather give their kids a legal way to buy online music, rather than having them download illegal MP3s (and fill the family computer with adware); actually iTunes already offers something like this.

Re:Complete idiocy

[thogard]

MasterCard only provides the network. The banks are the ones who "absorb the cost" and they do that by billing the merchant for most types of orders (on the net) and increased fees for consumers for other types of fraud. MasterCard takes something like .08% of the transaction value for their charge of doing the transaction. The banks on the other hand take 1.5% to 3.5% for normal clients plus $.20 per transaction charge plus your monthy fees.

The reason micropayments won't work is that transactions of any type costs real money. When you start having to audit the transactions, you can't do them for less than about $.06 each unless you do millions or are willing to absorb the costs of lost transactions. Are you willing to pay the transaction house $.10 on your $.05 page view? I don't think so and by the time it gets to be real money, Visa and MasterCard are already playing in that space.