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

Subscription-based websites

[SIGALRM]

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.

Re:Subscription-based websites

[irokitt]

Well, from what I see Microsoft has abandoned some of its posturing where Passport is concerned. There just isn't enough widespread acceptance to make it stick, like there has been for PayPal. I'm not saying that won't change, but for the moment at least Passport is simply a vehicle to let people log into Hotmail.

this COULD work

[spacerodent]

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.

Micropayments the other way around... User EARNS

[Calrain]

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...

a solution looking for a problem?

[sdedeo]

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.