Slashdot Mirror
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."
The biggest obstacle to using credit cards for micropayments is the cost of transaction processing
I wonder if the folks at Microsoft are considering Passport as a micropayment vehicle for subscription-based websites? Micropayments lower the threshold and do not require a big decision before users get their initial benefits: thus users will be encouraged to view more pages and spend more. Of course, there will almost certainly be discount schemes for frequent users of a site such that nobody would end up paying more than they would under a subscription plan.
Also, although a closed initative, the W3C Micropayments Working Group provides some interesting info.
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i could see this working if prepaid low limit debit cards became common. I would love to use prepaid $100 cards to pay for stuff online just for the added safty. You can't have your credit rating messed with if your not risking it. Plus it would make micropayments not a big deal. You could keep a $10 or $20 card handy just for that purpose.
My boss has talked a bit about trying to find a way to make some small amounts of money coming in constantly through micro payments... the only problem is, what could you truely market to make people pay micropayments for?
When I go to a site and they want me to pay to see content, even if a small amount, I always go elsewhere because (a)I font want to go through a hassle of paying to see a damn site and (b) I doubt right away that whatever lies within isn't worth my dollars.
One idea my boss had was perhaps people could come to a site and find a simular question they have, and pay to see the answer. I also fail to see how this would work either, as a little googling usually reveals the answer to any technical question I have. I dunno though, seems alot of people are always asking questions on irc without even trying google.... like they say:
"Give a man a fish, he'll eat for a day, but tell him to RTFM and he'll keep asking questions!"
What people don't realize, thay pay for internet twice. Most of the people pay subscription fees to ISPs, on the other end, people who provide the content forced to pay for web hosting. What is really bizzare is that the more popular your web site is, (i.e. more people go online to browse it, and consequently produce higher revenues for ISPs) the more you pay for the traffic to your web site.
In theory there is no difference between theory and practice. In practice there is. - Yogi Berra
1. Implement transparent micropayment on site.
2. Submit article to Slashdot concerning random article on site.
3. ???
4. Profit!
When traffic alone generates revenue nobody need care about selling a product or providing content. Just dupe as many people as possible into viewing a page. We're seeing this small-scale with affiliate programs, I predict we'll see much more of this before it's all over.
Whose need? Certainly not mine. Most web pages I visit should be glad they got a hit, much less my nickel. Say goodbye to "surfing" when everyone realizes they can charge-- I'm not going to pay to browse unknown sites.
Something else that hasn't been mentioned, you can also say goodbye to any semblance of anonymity when your credit card company keeps an enormous tally of every page you paid five cents to visit. And of course, they won't use that info. for market research, will they?
One of the reasons that "tokens" for micropayments are unpopular is the same reason that everyone hates those coupons you have to buy when you go to the local fair. You know, every vendor takes only coupons, so if you want to eat, drink, ride a ride, take a crap, or do anything, you've gotta buy a coupon.
But think about the business model of these coupons: people buy a large chunk of them (more than they acually need, so they won't have to go back and get more), and then don't spend all of their tickets. However, you paid for $20 in tickets, and only bought $15 in food, so they've already raked in $5 without any spending but for cheap coupons.
However, fairs and the internet are two totally different venues. At a fair, there is a monopoly run by the owners, and you can't exactly warez some popcorn off of bittorrent. The internet allows for alternatives. For example, if the NYTimes decided to require microcash payments instead of microsoul payments, I'm pretty sure that slashdot and other similar sites will be devoid of links to the NYTimes site. This is survivable because we have things called mirrors and caches.
I think we are missing an important way that Micropayments can be used.
The user can Earn money though Micropayments as well as spend.
Example:
Lets say you are a Meteorological organisation and you would like to get finer granularity of your barometric readings. You sell a mini weather station to a user, and the software provided captures the weather data for their location and uploads it to the Meteorlogical Bureau. The user earns Microcredits for this, cheaper than putting in your own weather stations.
I think Microcredits can be used both ways.
You can be paid for Rendering Images for a movie, performing 'Human Only' tasks for other companies, and have web sites that list all the things you can do to earn Microcredits.
Why can't I get paid in Microcredits to fold Protien Molecules for some Research Lab...
It seems like micropayments are a solution looking for a problem. Others have gone over the difficulties (mostly PR) that Rivest has; let's step back and take a look at why micropayments are meant to be exciting.
The idea, essentially, is that it allows people to make money off of their content in a new fashion. Instead of advertising or subscription, people pay, per use, to get content ad-free.
The web comics world is all very excited about this. Imagine! Cover your bandwidth and make money just for your art! No need to build a subscriber base for print copies, no need to get big enough to be ad-supported, no need to whore out on the side. Instead, get everyone to pay a tenth of a cent every time they want to read your page. Or maybe five cents for your monthly magnus opus.
Does this ever happen in the real world? When was the last time you paid five cents for anything other than a stick of gum from the General Store? Newspapers are the closest you get, but they are mostly ad-supported anyway, and your 75 cents is not coming close to defraying the cost of production. Perhaps giving money to buskers, but it's hard to imagine people would feel the same way about tossing a quarter to some anonymous fancy webmaster that they do about giving the same to some ragged hipster they see every day.
Meanwhile, except for a few self-promoters who also handily want you to deposit $10 in their micropayment system, web comic people are going with the old -- and apparently very function -- methods. They get advertising banners, they promote their hard copies, they do promotional work. Comics not big enough to hit this put up a paypal donation button, sell t-shirts, &c to the hard core fans who want to feel like they're supporting a cool indie artist. Meanwhile, musicians go out and give concerts; their mp3s and even their hard copy albums are mostly around to draw people in to hear a live performance.
So what is the big deal? It's an interesting intellectual problem, and this is a clever solution, but the idea of making scads of cash off of it -- and revolutionising internet content distribution -- seems to me to be a lot of hype, and something only those totally out of touch with how the various "worlds" of content have already solved this problem.
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I'm suprised no one has mentioned BitPass this is quite a mature micropayment system, the first one Scot MacCloud (of online comic fame) though good enough.
I already pay for internet access; why would I want to, or should I have to, pay for something which is currently free? So why do the ISP's get the internet dolars? Surely content providers deserve some slice of the cake.
As a very skint content provider, I actually think that I'm out compeating myself. We provide an online and highly rated database of information about plants, and also an offline version for sale. But hardly anyone want to actually buy the data as its free online. Sometimes I feel like just withdrawing the online version to boost sales. A good micropayment system could help keep such services online, indeed it might even stimulate more higher quality information on the internet.
Why publish for free?
There are four sorts of people in the world: fools, lunatics, idiots and morons. - Umberto Eco, Foucaut's pendulum.
Also wouldn't the businesses spend more money on processing these micropayments than the payments are? This system can only work on a truly large scale. This may force businesses to find a way of redcuing the costs associated with the internet, so it might actually work to our slight advantage.
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