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The March Towards Micropayments
Posted by
timothy
on Mon Jun 28, 2004 10:40 PM
from the just-send-me-e-gold dept.
from the just-send-me-e-gold dept.
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."
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Subscription-based websites (Score:5, Interesting)
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 [w3.org] provides some interesting info.
Re:Subscription-based websites (Score:5, Interesting)
Parent
Re:Subscription-based websites (Score:3, Interesting)
That isn't entirely true. I use it regularly to log into Expedia.
Re:Subscription-based websites (Score:4, Informative)
- 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.Parent
Re:Subscription-based websites (Score:5, Insightful)
So why should anyone expect a person owning a PC to pay for each play of a video game. We optimized that out long ago.
And I have not found too many places where you can actually buy music online. most allow you to rent it in their custom formats. Just a fancy DIVX without a timeout.
Parent
Re:Subscription-based websites (Score:5, Insightful)
There is always the issue that something can go wrong in between you and the merchant that can make that 1 view paid for content just disapear never to be seen again, eating your credit and not getting your content. I'm trying to strike up the similarity of like, putting your money into a vending machine and not getting what your paid for when the chocolate bar gets stuck.
Its hardly a wallet breaking scenario, but it is annoying and reduces a persons confidence in using such a system. If people are willing to use such a system with those risks its fine, but I hope that there is going to be additional effort in ensuring that these small transactions are done reliably.
Parent
Re:Subscription-based websites (Score:3, Insightful)
Johnny Bee - the world famous 15 year old mixmaster - opens a site offering MP3s of his latest crappy homebrew mixes for a micropayment of 10c. His site serves out of his DSL and fails to serve 50% of the MP3s requested.
I'm also a kid. I like Johnny Bee. Well - I found him on Google and throught it was cool to rap about muthafuckas in the context of a spelling bee. I just cli
Re:Subscription-based websites (Score:4, Interesting)
Micropayments won't work for 3 reasons:
First, there's too much free content out there. Why the hell would I want to pay to read one assholes opinion, when I can get a hundred free? Moreso, if I want to pay for some assholes opinion, I'm not going to pay a 5 tenths of a cent to view it. I'm going to go out and pick up a newspaper, at least then I know what I'm getting.
Secondly, the cost of hosting a website is decreasing dramatically since technology is getting better and better, while the tech we use to host websites isn't getting any younger. 10 years ago, everyone had dialup. Now most people have DSL. In 10 more years, everyone will have a T1 or better. In 20 more years, everyone will have a T3 or better. Think about that one: I could take thus uber l33t pimped out gaming rig and turn it into a webserver, and just wait for slashdot to try to turn it into smouldering dust on a home connection costing no more than $50 a month.
Finally, and most importantly, it can be hacked. Once we stopped trading with physical objects, nobody knows where the money goes and how much of it is out there. Moreso, how hard would it be to hack the encryped token or anything else that's sent too and fro? Overhead on the server is going to be big. How are they going to stop people from reposting their articles on a mirror? Would royalties get involved then, and then manditory laws for spying on users?
Then there's banner ad's, which provide quite a bit of revenue as is if you don't mind pleasing advertisers to make a buck.
Parent
reply (Score:5, Funny)
Re:reply (Score:4, Funny)
Parent
This means that "My 2 cents worth" (Score:5, Funny)
if slashdot starts charging this (Score:4, Funny)
Slashdot has already a micropayment system (Score:3, Insightful)
Paying doesn't necessarily mean "transfer of money", it can also mean giving some content back. YMMV.
Re:if slashdot starts charging this (Score:5, Funny)
Alternatively, slashdot could pay people for their accumulated karma. The users are what make this site. And the owners are raking in the bucks (well, if they were smart enought to cash in their stock options when they sold out).
Someone should start a new slashdot that pays the users for *their* content. I have relatively good karma points [slashdot.org] and it would be nice to share a chunk of that pie that they've been eating.
payment = (user_karma / total_karma_issued)*(revenue - expenses)
This would be a *real* OSS commentary site.
Parent
Re:if slashdot starts charging this (Score:3, Funny)
Yes! What this site needs is more reinforced groupthink. Now with cash!
Once money's involved, I have no doubts that karma whores will be scooped up by karma pimps. Then we'll need karma police. (Calling Radiohead ... come in, Radiohead ...)
technology 'maturity' (Score:5, Insightful)
That said: what's the desire, or demand, for micropayments in general? I can see how they would appeal for use in vending machines or game payments, but for per-view payments online?
The largest, and potentially only, source of income I can see for such a product would be through the porn industry. That way they might be able to more easily be able to meter out their 'service' in a commodity type fashion: "You 'used' X megs, so we charged you for that much" - as opposed to the blank service fee model, where the customer might frequently cancel the $5/month subscription, as "they didn't use it" *cough* and there'd be little/no incentive to pay for it.
Personally, I would stop going to most sites I currently visit if I had to pay for them. I already pay for internet access; why would I want to, or should I have to, pay for something which is currently free? "Premium" service on sites, however, might benefit - it would be easier to do a per-view billing model, again. For instance, on slashdot: charge $
Re:technology 'maturity' (Score:3, Interesting)
Re:technology 'maturity' (Score:3, Interesting)
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.
Ho hum (Score:5, Insightful)
What is the problem this is trying to solve? Why not group together (as a somewhat poor example) all of the OSDN content sites. You then pay, say, $5 for a certain number of page views across the entire spectrum. Each view is tallied and attributed to the appropriate site. Similarly, you can have organizations of news publications, technical publications (I'm thinking game and/or computer mags), entertainment of various sorts.
Look, as always, the porn industry is ahead of the game. Get one of those memberships to twenty different sites. They don't bill you by the page view, they let you hit all the sites. Look, if porn ain't looking at it, it's not going to work.
Finally, who the hell wants to type in a 16 digit credit card number, 4+ digit expiration, name, address, etc, etc, to view a web comic?
Oh, you can just buy 'points' and redeem them at various sites? What's flooz.com up to these days?
ignoring micropayment concept problems (Score:5, Insightful)
Ah, which ignores the two biggest obstacles to using micropayments:
a)People HATE getting nickled and dimed- hence the very origin of the term!
b)For websites and the like, people will simply seek out free content which is available in quantity. Bob starts charging micropayments for his webcomic. Bob witnesses most of his readers disappearing into the woodwork. Jane, Sally, and Joe notice little bumps in their traffic logs.
People just can't seem to wrap their heads around the fact that some stuff just isn't considered by the public worth paying for, at any price.
Oh, not to mention, the micropayment guys seem to like charging as much or more than the credit card companies, the money is not very accessible, and so on.
Re:ignoring micropayment concept problems (Score:3, Interesting)
unfortunate, because I think roads should be toll based. and I think that if I was a guy whose only passion is drawing comics, I'd rather get paid a little less by everyone than have to take the time to do some marketing.
time to start... (Score:3, Funny)
this COULD work (Score:4, Interesting)
credit cards and gambling (Score:3, Interesting)
Many gambling websites such as http://www.onlinegambling.com/ [onlinegambling.com] and http://www.partypoker.com/ [partypoker.com] allow users to gamble using credit and debit cards. They also provide other methods of payment such as paypal - which uses a savings/checking/credit card account anyways. The online gambling industry is thriving.
I think micropayments would work very well for people who want to download music, do research, or gain the benefits of some other inexpensive transaction.
I wonder if this business model would work? (Score:3, Interesting)
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!"
Re:I wonder if this business model would work? (Score:3, Informative)
Not all questions are easily answered just by using a search engine, particularly very general or very complex questions. But Google pretty much already do what your boss suggested. Go to Google Answers [google.com]. You can browse the previous answers so if your q
Underlying assumption still wrong (Score:5, Insightful)
this creates a problem (Score:5, Insightful)
Sorry to pick nits.. (Score:3, Funny)
Re:Sorry to pick nits.. (Score:5, Funny)
No, $0.0000001 would be one hundred nanopayments, actually.
yo.
Parent
Complete idiocy (Score:5, Insightful)
I consult for an organization with a billing system that sends out bills for as little as $0.01 and as much as $5-6 million for a quarter. If the app supported it, they could probaly bill to the tenth of a penny if need be. The system doesn't care.
The only difference between MasterCard and a micropayment system is scale and profit. Given a scalable global system, an transaction is a transaction. Each transaction has a distinct cost associated with it, which is really not relevant to the value of the transaction. The cost of a $15,000 transaction is nearly the same as a $0.015 transaction.
And therein lies the problem. In order to make micropayments affordable, you need to drop highly profitable fees on small transactions... plus your customers will start to question your high fees on larger transactions.
The banking system makes far too much on "macropayments" to scuttle the whole thing to accomodate small payments.
Re:Complete idiocy (Score:3, Insightful)
I got a bill for an 8 cent phone call I made once. I sent back a check for 8 cents, with a note saying "I'd like to point out that you probably spent about 20 cents on postage to send me a bill for 8."
Re:Complete idiocy (Score:3, Informative)
The reason micropayments won't work is that transactions of any
Patent Pending (Score:3, Insightful)
Are they applying for a patent for adding several numbers together? I have prior art! Specifically, I added several numbers together while in Rivest's class! (Did he steal this from me?)
Nonsense (Score:3, Insightful)
I'm sorry but if your business strategy requires collecting $0.005 per page visit you don't have a business strategy. Sure $0.005 is nothing but in order to play that you have to register, log in, etc... I'd rather spend those few seconds finding an alternative free site or if that doesn't exist flat out stealing your content from whatever on easily found source is hosting it. It's the principle of it. Offer something of real value and people will pay for it. Do nothing and try to skim off as much as possible without people noticing.. don't expect me to blink as I shoot that one down.
Need? (Score:3, Interesting)
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?
You know it's coming... (Score:4, Funny)
how well does micropayments work for slashdot (Score:3, Interesting)
Micropayments == Ads (Score:3, Interesting)
I'm not going to go to a web-site and whip out my credit card just to spend a few pennies. The effort isn't worth the "reward." But if an ad is interesting enough and the site isn't vomiting ads in my face I won't hesitate to click on the ad. They get their "micropayment" with no hassle on anybody's part.
Content owners need to take a hint from Costco et al and sell in bulk. Digital Blasphemy charges for access to some of their new material and access to the archive.
Charging per comic or per page is just silly. Would you pay a penny for a single page out of a book? Have the most recent X days of strips free and charge for access to older strips. That gives visitors the ability to get a good idea if your work is of any quality and the fans the ability to support the author in a reasonable fashion.
Someone needs to take this micopayment horse out to pasture and put it out of its misery. The only people making money on this scheme are the people who come up with these cheesy products that alledgedly handle micropayments.
Ben
iTunes (Score:3, Insightful)
Correct me if I'm wrong, but doesn't iTunes Music Store already do this? I've sometimes bought a song and then bought another one a day later and had them show up on the same invoice (and the same resulting credit card charge). Doesn't seem like a big innovation... and doesn't Amazon do the same thing with 1-Click also? (which Apple licensed) So now we could have two companies with silly useless patents for pretty much the same thing - with any luck they'll spend millions in litigation and end up appropriately punished for their patent-mongering.
I don't see how useful this would be in arcades anyway - most of the newer ones (Jillian's, Gameworks, et al) already have their own micropayment systems in the form of stored-value cards. Maybe in free-standing video games, but those are getting less and less common these days, and your neighborhood pizza parlor isn't going to have room for a cockpit-sized racing simulator anyway (or even a DDR game for that matter) - nobody's paying $1 to play a round of retro Pac-Man these days.
Shouldn't this be under patent abuse? (Score:5, Insightful)
How in the world is that patentable? Apple has been doing that with iTunes since the beginning. Google also doesn't handout checks for AdSense until you have $100.00 or more accumulated.
People have also mentioned Wal-Mart dropping a charge from their credit card because it was such a small amount that lingered for too long.
This company is patenting something companies have done for a very long time and then calling their product 2.0. Pretending this is going to translate from video games (anyone who's worked or played in an arcade knows how fast quarters fly completely obvlivious to how much has been spent) to the web is just ignorant. Nobody is going to be sitting on a web-site dropping "quarters" for hours. There's not enough "excitement" to distract visitors from how much they're spending.
It's a whole different paradigm from playing games at an arcade.
Ben
Micropayment tokens vs. county-fair coupons (Score:3, Interesting)
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.
Micropayments will come, if you like it or not! (Score:5, Insightful)
Selling ringtones has turned into a multi-million dollar market.
The Internet as most of us have come to know it, is constantly changing (big news). So do our consuming habbits (really now?). After all, we are creatures subjected to evolution.
While the aeroplan was being invented, the common person had the same argumentation: who will want to fly?
Or befor cable was introduced, many of the common folk suggested, it would be impossible to get consumers to pay for something, they are already getting for free.
I am not willing to subscribe to a site, though I would be willing to pay to view certain articles/content. Now not every article will be worth while to pay for, and this is the point where a business plan comes in. Enough said....
Micropayments the other way around... User EARNS (Score:5, Interesting)
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...
No Go (Score:3, Interesting)
It's not inconcievable I could be charged a dollar a day, $365 per year. Can I afford that? And how about the stuff which charges whole cents per pageview, such as maybe news sites?
People recognize instinctively that small stuff adds up, and that small stuff for which you can't easily do the math in your head will wind up biting you.
This is why micropayments are DOA.
Browser integration (Score:5, Insightful)
a solution looking for a problem? (Score:5, Interesting)
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.
Re:a solution looking for a problem? (Score:3, Insightful)
The difference between the physical world and the internet is immense.
In the physical world, just moving a sheet of paper from your headquarters to a store where someone might buy it is going to cost you quite a few cents. And in addition, even if you manage nearly-free distribution nation-wide, you are missing out on BILLIONS of people who might be inter
Re:Micropayments are a nice idea but... (Score:3, Insightful)
You're a huge dick. I can't believe tripe like this gets modded up, especially when there are 20 other posts that say the same thing, but aren't racist.
Re:Micropayments are a nice idea but... (Score:3, Interesting)
The real Houdini move there would be in getting people to forget that they didn't want to pay for the content in the first place by having a payment scheme twice removed (!).
You'd rather something be free than available for micropayments. But, with the choice between flat-rate and micropayments, sheeple would probably want