
Whatever Happened to Micropayments? 318
prostoalex writes "Remember Flooz? Or Beenz? With a few notable successes (PayPal, and that's about it) online micropayment industry is saving its success stories for future generations. New York Times reports about two nascent micropayment systems, one coming out of Stanford, one out of MIT, that are supposed to help the content producers and Internet users to engage in less-than-a-dollar financial transactions without huge overhead costs, so typical of credit card payments. BitPass requires you to purchase a virtual debit card with a certain amount on it to pay for products and services, and PepperCoin consolidates numerous micropayments into one bill that is then split between the content providers that managed to sell their product to the Internet user." I still believe that single penny transactions will revolutionize the net.
micropayments on /. (Score:5, Funny)
Plus, a micropayment system on
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Re:micropayments on /. (Score:2)
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Er... how much for +1 Karma?
Guess
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Re:micropayments on /. (Score:5, Funny)
Priceless.
Well... (Score:2, Funny)
A web-bug based micropayment model (Score:2)
Yeah (Score:5, Funny)
Re:Yeah (Score:2, Funny)
Wow, now THAT's what I call a MICROpayment.
It must be at least $1.50 Canadian.
I dont get it... (Score:4, Insightful)
Missing the Obvious (Score:5, Insightful)
One of the reasons a 3 cent transaction is doable is that there is not a business making the transaction unworkable by adding a fee. The voter is once again uncouncious, failing to force government to live up to its obligations.
Re:Missing the Obvious (Score:5, Interesting)
Governments should absolutely be moving with the times and providing transaction-fee-free plastic money and online money. Currency should be as neutral and transparent as possible, in order to facilitate a smooth and efficient marketplace. We've always supported the overhead required to create and manage the paper money, we should do the same for modern currency.
~
Re:Missing the Obvious (Score:5, Interesting)
With plastic the government has to become a bank (the money the card represents has to be managed by somebody). This implies that people have the ability to get money into the bank (direct deposite, tellers, etc..). That's big money right there.
Then there is the question of fraud.. with money there is no question. Posession almost entirely determines ownership of paper money. When someone robs you, it is a criminal matter. However, if you don't catch the crook you don't get the money back. With plastic fraud is much easier to get away with (you just need a number after all), and so government has to support THAT as well.
So the government is going to have to get into the banking business... which is not something I beleive it should stick it's nose in. Let it make the currency, leave it to the private sector to manage that currency.
Re:Missing the Obvious (Score:3, Insightful)
Huh?
What on earth are you talking about?
It is not up to the government to provide an accounting system. The government (at least the US, European, and most Asian governments) does, indeed, provide a robust and useful currency system. Most even have currencies that are available i
Re:Missing the Obvious (Score:2)
The Web really could become a vital new part of the economy if we would simply set up a single system to manage some sort of e-cash suitable for micropayments. The govt. would simply "print" long random numbers each representing a penny, nickel, or dime. Then a centralized system would have to cancel each number when it was spent. The reason it can be done economi
Re:Missing the Obvious (Score:2)
Useless? The cost of using a public restroom in Paris, when I visited this summer, was 41 cents.
Re:Missing the Obvious (Score:2)
The cost of using a public restroom in Paris, when I visited this summer, was 41 cents.
That explains why the Parisian subway system always smells like urine.
Re:Missing the Obvious (Score:3, Insightful)
Re:Missing the Obvious (Score:3, Informative)
Sorry, wrong. Here's the US Treasury FAQ page [ustreas.gov] for this question.
Here's the main point:
There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own pol
Everything on the Net is Free (Score:2)
Unfortunately, the idea that everything must be free leads us to the less than desirable situation where only the politically connected or the idle rich will be in the position to provide high quality info on the
Defining the competition (Score:2)
In general, competition creates an environment where products get better. The problem at this point is that there is not enough companies working on micropayment models.
The long delay in establishing micropayments was created in part by monopolistic
Re:Defining the competition (Score:2)
The problem is that companies to date have approached the issue with monopolistic thinking. One company owns the transaction from consumer through to the site. The idea that one company owns the entire transaction creates the apparent need for a monopoly. To bust the monopoly, you need simply create a mechanism where different companies can own parts of the transaction
systems get accounts with eachother (Score:2)
Why not? PaySite uses PayAlice. In order to give my two cents to PaySite, I have to give two cents to PayAlice. Fortunately, I have an account with PayBob -- and PayAlice has a merchant account with them. I simply use PayBob to give 2 cents to PayAlice, and PayAlice transparently passes it on to PaySite. This is an awfully large favor on the part of PayAlice -- but it's worth it, because through this alliance they've doubled the number of
What happened? (Score:2, Interesting)
--
1-800-759-0700
Re:What happened? (Score:2)
Re:What happened? (Score:2, Interesting)
That's a long ways to go... (Score:2)
Ok.. (Score:5, Insightful)
Call me an old curmudgeon but I think micropayments are just another new way to be (pardon the pun) nickel and dime'd to death. My bank already does it with service charges, my phone company does it with every little "feature", my cell company does it, et al ad nauseum.
The only ones that will PROFIT!!! from this are the big companies pushing it on us.
Banner Ad Armageddon (Score:2)
The net as a culture dealt with advertising, and we'll deal with micropayments, too. The sites that try to nickel-and-dime you to death will die the same death as the sites that spam you with endless pop-up windows, blinking banner ads, or shoshkeles [unitedvirtualities.com]. The e
Re:Ok.. (Score:3, Insightful)
Call me an old curmudgeon but I think micropayments are just another new way to be (pardon the pun) nickel and dime'd to death. My bank already does it with service charges, my phone company does it with every little "feature", my cell company does it, et al ad nauseum.
I think you don't understand the concept of micropeyments... Making you pay 15 dollars for some service, even if you split the payment into 100 parts does not make it a "micropayment".
A micropayment is when you pay a few cents for somet
Re:Ok.. (Score:2)
Just 5 cents per month (Score:4, Insightful)
I've figured out that if I could get each unique visitor to pay me just a nickel -- 5 cents -- per month, I could take down the banner advertising, quit my day job, and work on my site full time (and therefore make it that much better with more information).
Think about it. What if you had to pay content sites just $0.05 per month to access the content? Most internet users visit perhaps at most 100-200 different content sites per month. That would add just $10 to your monthly bill, and all advertising could be eliminated.
I would think that sites that are successful in selling you things -- like Amazon -- wouldn't charge you to enter, so that may even cut down on the number of sites you have to pay for each month.
With a price point of just $0.05, you wouldn't have to think to yourself, "gee, should I click on this link, do I really want to spend the money"?
I've tried various forms of banner advertising, sponsorships, commission links, etc., but I still can't earn close to $0.05 (on average) from each visitor (I'm at about $0.003 per unique).
I don't want to make my site into subcription-based, I'd rather keep it free, or free enough so that people could still easily view it.
Face it, the content on the internet has slowed down a lot since the dot-bomb. That's a direct result of there being no money in content publishing. It's closing up even further; one by one sites are becoming subscription-only. Pretty soon the internet is going to be one big magazine rack with the magazines all shrink-wrapped, and just a few free-zines in the corner.
Simply giving web publishers a few table scraps each month would dramatically revitalize what was once a very promising source of content and entertainment. Micropayemnts are one of the few ways that this can happen.
Re:Just 5 cents per month (Score:4, Insightful)
Aye, therein lies the rub. Once they discover that people are willing to pay micropayments for access, even the commercial players like Amazon won't be able to resist.
Soon, Amazon would be free for people who have purchased $n worth of stuff, and a micropayment for people just browsing. After all, if you're merely using the site as a reference, you should be happy to pay. Oh, and why should they foot the bill for you to comparison shop? Etc.
And prehaps it's redundant to state this, but the size of a micropayment is proportional to the number of sites requiring them. When every site costs $0.01 / visit, soon "premium" sites will cost $0.015, and so on. Eventually, we get the magazine situation you describe; the mechanism may be different, but the net result is the same.
Sounds promising... (Score:2, Insightful)
Whatever Happened to Micropayments? (Score:5, Funny)
I believe they fell through the cracks.
Micropayments just became nanopayments... (Score:5, Insightful)
I believe the problem with micropayments is the lack of a 'lender of last resort', namely a government backing the scheme. In countries where governments have shown an interest (Finland, Japan,...?) micropayments seem to work just like any other kind of virtual cash.
Certainly there is no technical hurdle to overcome: compared with giving someone your credit card and saying 'I trust you to take what I owe you and no more', and sending them a 'cheque' by email (PayPal) or by SMS (a system I wanted to make), it's clear that a payments system does not have to be perfect to succeed, it just needs backing from banks and government.
Presumably banks are wary of real micropayments because they make so much money from credit cards, the main alternative.
Presumably governments are wary of real micropayments because they see their tax bases being nuked.
I don't see either of these fundamentals changing soon.
PayPal succeeded because they found a niche that was opening at the time, and were were very good, very lucky, to exploit it fully. But without credit cards in the background, PayPal would never have worked.
The MicroPayment conundrum... (Score:5, Insightful)
Let's say Slashdot joins MicroPayment provider X, and New York Times Online joins MicroPayment provider Y, I need to have accounts with X and Y if those 2 websites happen to be in my favourites.
Interoperability needs to be sorted out right up front; otherwise no one company will be successful.
The obvious players are Visa and Mastercard. I suspect that they are just treading water until there is a whiff of possible competition, at which point they will swoop in together make MicroPayments happen between them.
Re:The MicroPayment conundrum... (Score:2)
For some reason they are waiting.
Re:The MicroPayment conundrum... (Score:2)
Obviously charging $0.50 for a $0.01 transaction is stupid so Visa/MC would have to come up with a different payment method.
I don't see why they couldn't have merchant accounts that log the transactions and bill the merchant $1 per X transactions (every 1000 Slashdot pennies for example). It would all be automated anyway.
I think the reason is the retailers will cry foul that they have to pay more and currently the CC companies make
Naaah. There's no conundrum. (Score:2, Interesting)
Re:The MicroPayment conundrum... (Score:2, Insightful)
Nobody cares about micropayments (Score:2)
The costs of processing and verifying tiny transactions make it difficult to process such payments and make a profit.
The real reason micoropayments haven't worked: (Score:5, Funny)
Paypal's success was based on $10 free/eBay (Score:5, Interesting)
Paypal also had a lot of marketting muscle and a catchy name.
To top this off, Paypal also started to guaranty their purchases.
It also ended up being the way that Paypal was used for other payment services because of the debit card that allowed it to prosper. I would for instance use my Paypal card to pay Billpoint or PayDirect if it was offered. This would get me 1.5% back.
StormPay and C2it are the services frauds use. Bidpay is reasonable, but never use it to pay for anything just to be paid.
The author misses Paydirect, which controls Yahoo payments. This is a decent service and is in some ways a superior "eshopping cart" service. Many small websites or discount hardware websites use Yahoo stores and the PayDirect service.
I do agree with the author that "penny payments will revolutionize the internet though" - I see the internet broadband/wifi/otherwise being free in most cases within 10 years. I see ISPs as selling "credit cards" rather than subscriptions. These cards would allow you to send and receive email and view websites. The ISPs in turn act as a bank for websites such as Slashdot. Paying them for the number of views that have crossed their service say 1/100th of a cent for every page view.
I think email should cost 1 cent to send, 1 cent to receive. I think it should be 1 penny each page/email view or bulk 1000/100MB /views for $1 -- 10,000/ MB/ views $10 -- 100,000/MB / views $50 - therefore sites that want to remain free can, sites that want to charge can almost transparently.
Re:Paypal's success was based on $10 free/eBay (Score:5, Insightful)
You can't forget about the spammers
Now, if you DO want to charge for receiving emails, charge some sort of a flat rate, scaled slightly by bulk; if you recieve thousands of emails, your rate goes up. If you recieve a couple a week, the rate is a bare minimum. This would, again thinking about spam, require that the companies charging for email access use extremely good spam blocking systems, and provide a method of allowing users to quickly and simply report spam that slips through the cracks, perhaps an address to forward to, which is randomly checked by humans in order to prevent abuse. This way, it is entirely up to the user to deal with any spam that doesn't get blocked, and if they get charged for anything they didn't want then it is entirely their fault.
So, in order for a company to charge for incoming email and not start hemorrhaging customers, they will have to both offer a quality of service significantly better than 'free' services, and also provide a means for the user to not get economically raped by unsolicited email.
just my oversized $0.02
(imagine if it did cost $0.02 to post on slashdot.. wouldn't that be ironic?)
Payment System (Score:5, Informative)
What worked best was simply putting an inexpensive yearly fee in place. People pay once and can forget about worrying about any recurring charges or running up some kind of tab that will only come back and surprise them later.
After a year, more than half of them renew their accounts too. And just so they can have access to a giant database of humorous, strange, and twisted photos and media files. Go figure ...
Sarcasm? (Score:3, Funny)
Disaffected youth #2: Are you being sarcastic, dude?
Disaffected youth #1: [dejectedly] I don't even know anymore.
Micropayment standards are great! (Score:2)
Re:Micropayment standards are great! (Score:2)
Micropayments with the iTunes Music Store? (Score:4, Interesting)
Re:Micropayments with the iTunes Music Store? (Score:4, Informative)
They also clump together purchases made over a 48 hour period into one, larger purchase, cutting down further on bank fees...
Re:Micropayments with the iTunes Music Store? (Score:4, Informative)
Apple solved it... (Score:2)
I suspect that, as with the labels, there was a sense that this was one of those "experiment with a 3% population" things, and they saw they could make money.
Cooperative (Score:2)
Try Xanadu (Score:2, Informative)
It was set up originally to help content manufacturers so they could choose how much to reimburse their goods with. You could choose free, if you wanted.
Bandwidth still costs no matter what, so this could at least pay for bandwidth. And who WOULDNT pay
Xanadu also provided for searchable media: An mpeg movie is linked from IMBD to a sec
And because they designed in a circle. (Score:3, Insightful)
AND because the people with the management's ear "rabidly prototyped" rather than designing and staying focussed on getting a product out, and pushed aside those in the project who asked them hard questions.
So they pushed the problems around from module to module rather than solving them. And
Micro-content providers (Score:3, Interesting)
If we are going to have the concept of micro-payments, why can't we have micro-content providers?
I regularly post to Slashdot. I am essentially a micro-content provider to Slashdot. I have posted over 800 comments, many of them high Karma scorers. If I made, say, one cent per Karma point, then I would be about 30 dollars better off by now! Woohoo!
Re:Micro-content providers (Score:3, Interesting)
I've been thinking about adding some kind of micropayment system to my book review page.
"If you found this review useful, please click here to donate 10cent to our bandwidth bill" or something. But adding the possibility of diverting some of those cents to the person who wrote the review and some of them to the sites account, would be very, very interesting.
Today people just write the reviews because they can and for the fun of it, but nothing says "I like that" as a bit of money, even if it's
Re:Micro-content providers (Score:2)
wrong. nothing says "I like that" than someone telling you personally "I like that". Nothing says "I can use that for my own betterment" than a bit of money.
Re:Micro-content providers/rebates for moderation (Score:2)
Maybe a site like Slashdot could charge "micropayments" but rebate to it's users that have high moderation. This may have an effect on eliminating troll posts and encourage well thought out responses.
I too pride myself in the high moderation I get here & substantial page views/responses I get elsewhere. I mainly use this site & other Mac Chat/Forums sites as a way to "micro-advertise" my website & my eBay auctions. I figure, if people think I s
What about non-virtual 'micropayments' (Score:5, Interesting)
What about non-virtual 'micropayments'/Tax Free? (Score:2)
How does the person who "donated that money" not spending it elsewhere vs the person it was "donated" to spending it going to change the economy in any way?
Re:What about non-virtual 'micropayments'/Tax Free (Score:2)
Re:What about non-virtual 'micropayments'/Tax Free (Score:2)
Re:What about non-virtual 'micropayments' (Score:2, Insightful)
Even if businesses did get more money from this (which assumes that consumers currently send all their change to
gnutella + micropayments (Score:2)
if we (the gnutella community) could successfully integrate bitpass transactions with gnutella content, we may offer the biggest non-infringing use of gnutella yet (and shut up the RIAA).
DIY (Score:2, Insightful)
Taco, if you really believe that, then Slashdot is the place to launch TacoBeans the new micropayment solution from OSDN. Seriously.
If you don't really believe it, why did you say it ?
The Right Idea at the Right Time (Score:3, Insightful)
1) They debuted at the height of the dotcom craze, when advertising money, venture capital, and ludicrous business plans were everywhere. Back then, users were getting so much of their online experience subsidized by these factors that micropayments weren't attractive to them. Now, in the depressed post-boom environment, micropayments are becoming attractive to consumers again.
2) Most micropayment companies focused on the wrong markets. Micropayment companies have traditionally focused on large content providers, trying to get already successful businesses to change their business model to something their consumers were skeptical or even resentful of. BitPass, however, has instead focused on a bottom-up approach, marketing to individual content producers like webcomics creators, artists, and musicians, who haven't been able to charge what their work was worth until now. I think this is going to be the deciding factor in their success.
I'm working on a BitPass user group site to help the BitPass community grow. If you're curious, I'll post to my journal [slashdot.org] when the site is up.
No. Micropayments are dead. (Score:3, Insightful)
The amount of time, effort and money poured down this rathole is really sad.
This has been answered! (Score:5, Informative)
All micropayments are not created equal. (Score:5, Interesting)
In the real world, Shirky's argument translates to: "No one will buy a candy bar for 50 cents because they will be paralyzed by the user overhead." And, of course, we know this wrong. The candy industry (just to give an example) makes millions of dollars of profit a year selling 50 cent candy bars.
Likewise, there is a legitimate zone of value for digital content that falls between a dime and a couple bucks. 50 cents for an online comic you like, or for a song from a band you want to support, isn't any different than 50 cents for a candy bar.
Micropayments are just payments. And I think it'll be funny if, in a couple years, the artists and writers and bands who are making money off of micropayments can read Clay's article and have a good laugh.
Re:All micropayments are not created equal. (Score:3)
Micropayments require substantial data infrastructure. Think of the electricity in your house. It might cost, say, $.01 to have one light bulb on in your house for 10 minutes. So that's a mi
Re:All micropayments are not created equal. (Score:3, Interesting)
> The people that want a specific candy bar will pay for it if it means they can't get that candy bar otherwise.
Speculation, and I assert otherwise. Find a counter example.
>Just because something's free doesn't mean you want it, as plenty of ugly couches left on the curbside with "FREE!" signs on them can attest.
Have you ever moved a couch? That's a high transaction cost, not a free one. Notice how I talked about the cost of negotiating the transaction, not the dollar value of it. Find a b
Whatever happened? Two problems (Score:2)
Banks control financial transactions in the western economy, and with banks charging $1 - $3 for ATM transactions (and similar outrageous fees for services that were once considered part of the package of using a ba
Who cares about the tech? (Score:4, Insightful)
Until you can convince consumers and possibly their service providers to accept micropayments, you might as well employ trained chimpanzees to do the actual processing.
A bad idea that shoud have stayed dead (Score:3, Insightful)
Ugh. Micropayments were a bad idea back in the dot-com days where they were concieved, and they're still a bad idea today. People won't visit sites where they are going to be (literally) nickel-and-dimed to death. People don't want yet another financial account to keep track of, yet another critical login to remember.
Even if one of these schemes manages to attract an appreciable following, large enough to be noticed by the credit card companies, then what? All it would take is a simple policy change to put them out of business. Maybe $50 gets unlimited sub-$5.00 transactions per month, or something like that. The whole micropayment concept is necessitated by the desire to avoid high transaction fees on credit card payments. Once the credit card companies wake up and provide a plan tailored for the smaller retailer, the entire micropayment industry disappers. Perhaps it will take a micropayment company that looks like it is on the verge of real success to do it, but as soon as they attract the attention of the big boys, they will be wiped out, pretty much overnight.
Any business that can be invalidated by a policy change by a larger, competing institution is not, in the long term, viable.
Nuisance cost (Score:3, Interesting)
If people have to take deliberate action to spend a penny, it's not going to work; at $7.20/hour, if it takes them five seconds to read and respond to a prompt, they've spent more in their time than the penny they're paying.
However, if the payments are made automatic, a different problem takes over: People aren't culturally ready for having their money spent, by a computer, on their behalf. Never mind that every time their thermostat turns on, it's spending their money -- that's sufficiently hidden from the users.
The only way I can see micropayments becoming mainstream is if they are refundable within a given time limit -- but that would only work if people don't start "charging back" all their payments.
small easy payments (Score:2)
And other e-currency thingies...
What if micropayments just worked? (Score:3, Funny)
1) one day, people will find a way to make it profitable, and
2) when that day comes, you'll already own the market & make back everything you lost.
Just do business & wait for technology to catch up. There's too much fussing about whether or not it would be profitable from the get-go.
Here is my 2 cents worth... (Score:2)
Mobile phones... (Score:2)
Micro-payments are alive and well and operating on mobile phone networks the world over. Next generation mobile phones will link directly to your PC, thus providing an idea micropayment structure via a "known" organisation (rather than people like PayPal).
Micro-payment is here, its just not where you were looking.
Paypal is *not* micropayments!!! (Score:3, Interesting)
Re:Paypal is *not* micropayments!!! (Score:2)
will micropay for mod points... (Score:2)
Already answered years ago... (Score:5, Insightful)
To summarize, when the cost of clicking a link is only time (how long will it take to load that link on my 28.8 modem), its a relatively simple decision. When its both time and money, a judgement has to be made. Sure, for a penny a page, one might not worry about it, but nobody's going to make money on a penny a page, no matter what "they" say; that only works on click-rates the size of CNN, MSNBC, Slashdot, source-forge, etc. And even then, when they see "the bill", it'll be like getting their first credit card bill and having no idea just how much they "spent" online...then they'll be reconsidering each and every link and users don't want to do that.
Users surf or they don't. If you had to pay a per-minute charge for doing real surfing in the pacific ocean, you wouldn't surf, so (extending the metaphore) why would you do it at home? There's a reason AOL and all the other ISPs got rid of their traditional per-minute charges and people buy cell phone and long-distance plans with max minutes instead of per-minute charging; the variable at the end of the month isn't worth the hassle.
Points of View (Score:4, Insightful)
Let's look at some real-world examples:
I think the real problem is that much of the internet's content just isn't worth any money to us. We can get a lot of content for 50 cents per day from the local newspaper. We can get content faster from TV at no incremental cost (but arguably less convenience). The internet can be great, but I ain't paying for Slashdot. The Motley Fool already lost me when they went subscription; they just aren't worth it.
If most everything interesting went pay I think there would be enough people volunteering news/info sites and discussion boards that we could still get our free internet. We may have to move to a p2p distribution model since running a centralized site as busy as Slashdot, for example, costs a pretty penny in bandwidth.
Read this article about micropayments first (Score:3, Informative)
http://www.openp2p.com/pub/a/p2p/2000/12/19/microp ayments.html [openp2p.com]
Rich.
Confused (Score:2)
nickel-and-dimed to death?
Fact is most sites have to have a revenue source.
If they aren't selling goods they gotta get money somehow.
Paying a 1/2 cent to read an article or a comic doesn't seem as bad to me like everyone makes it out to be.
Why the backlash against them here?
E-gold (Score:3, Insightful)
Been running for years, working really well, the only thing is the slow adoption rate and the fees. When (or if) this reaches critical mass it will be the best of all the options.
This is how i pay for my hosting and brought my domain name, not no mention a few other things.
SEO, Copying and other Resistence (Score:2)
If your web site requires micropayments, or subscription fees, then your content doesn't get indexed by the search engines. This means that you don't get the web traffic you desire.
Likewise, people will stop linking to your web site. You won't get slashdotted, etc.. Notice how you rarely see
The resistence to your work caused by asking for a micropayment is far greater than the
Will work for Flooz (Score:2, Insightful)
The only people crying for micropayments are websites that produce "content" that's nearly worthless. If the content is worth something, people will make macropayments to subscribe. If the content is essentially worthless, consumers are not going to push to be charged an amount so small that they don't notice it until the end of the month, an
Social aspects (Score:2)
Micropayments are often discussed from technical and commercial viewpoints, without considering social aspects.
The world's biggest information providers are, by and large, in first world countries with strong currencies. The most needy (as opposed to the biggest) consumers of this information are in third world countries with weak currencies.
Micropayments stand to put huge amounts of information beyond the reach of those who need it in the process of improving society, and quite often the content provi
Remember that randomized solution (Score:2)
How does Apple handle $0.99 music store payments? (Score:5, Interesting)
I've been hearing for years that the cost of handling credit card payments makes it impractical to use it for purchases of less than about $10. So how does Apple do this?
Certainly a big appeal of the Music Store is that you pay only for what you use and are NOT saddled with an automatic $5.95 or $8.95 per month.
Do they batch them? Do they actually lose money on someone who only buys one song a month, and gamble that most users will buy more than that?
Re: Whatever happened to Micropayments? (Score:2)
EZ-Pass toll payments and "recharging" (Score:3, Insightful)
So perhaps one of the things that's happening with micropayments is that these "credit card auto-recharge" accounts are serving some of the functions for which micropayments would otherwise be needed.
I'm not quite sure what happens when you terminate your EZ-Pass account; I assume they send you a check for $6.22 or whatever. I suppose that if I had thirty or forty of these accounts, it might get to be annoying having $500 or $1000 tied up in tiny, non-interest bearing, spendable-for-only-a-single-purpose accounts.
As far as I'm concerned... (Score:2)
rogerborn (Score:2, Insightful)
I think its great. I sell my stories and novels there for a dime or more. I have been doing it for a week, and already have had an amazing amount of sales.
Seems to work for me, when nothing else I have tried ever worked before.
Forget the honor system or begging for donations. Micropayments just works.
Roger Born
Writer, Teacher, General Troublemaker
rogerborngraphics.com
street performer protocol - or meter-based scripts (Score:3, Insightful)
what content sites -should- do instead, is let people charge up a site-specific 'meter', with say, $5. and as they view content, you deduct micropayments from the script total. when they hit 0, you either bring the ads back for that user or prompt em for more dough.
alternately, sites could just use the street performer protocol. seems to work just fine for every worthy webcomic to date. if not enough people buy t-shirts and prints and collectibles, you close up shop and go somewhere else, or try again (perhaps in a different format).
no need for pvp or penny-arcade or homestarrunner to go to micropayments. sites less dedicated to merchandising can stick with metered subscriptions. everyone wins. (except the micropayment banks)
its just easier for everyone involved if you ask me. plus, there's no additional costs/worries/security issues that you'd get with micropayment banks charging fees, going under, getting hacked, etc, etc, etc
Simple reason why micropayments are bunk (Score:5, Interesting)
When you contest payment with your bank, what happens? Well, you talk to an actual live human being, who will do actual human things, and make a decision on whether to refund you the money and whether to prosecute a third party. And your transaction fees pay his salary.
What happens when you contest something with PayPal? You drop them an email (good luck trying to talk to anyone), and then they freeze your account [paypalsuit.com], sieze (i.e. spend) your money, and (if they're feeling particularly communicative) tell you to go screw yourself. They do that not because they're evil (although they probably are) but because they simply don't make enough margin on their transactions to be able to afford to investigate them, and because they know that it's not worth anyone's time to sue them, even in small claims court, for the contested amounts.
Now, when the transaction value drops to 1 cent, what's the best case margin on that? You've got purchase and maintenance costs on your servers and database, plus bandwidth costs for those 128bit SSL encrypted transaction details that fly both ways. Half a cent? More if you handle a lot. A loss if you don't handle enough to amortize your setup costs.
Now, how many fraudulent transactions do you have to have - from a single source - before it's worth taking any action? It costs ten cents for a staffer to click on a button, so you're talking twenty transactions. If the staffer has to think at all, it's a hundred. If they have to do any investigatation at all - for example, to decide if a bunch of transactions are from a single source - it's thousands. If you want to hand it over to a lawyer or other third party, it's tens or hundreds of thousands.
But that's fantasy land, because it's not worth even recording the details of the transaction that would allow you to decide if it was fraudulent or not. The logs themslves would take a huge chunk out of your profit. You'd simply have to trust the referrer.
Well, that's not working out too well for credit cards [theregister.co.uk] right now, but at least cc issuers can pass back all the costs to online retailers [e-gateway.net] for credit card fraud.
But if it's not worth your while even retaining transaction records for micropayments, or to investigate fraud after the fact, how are you going to protect themselves from fraud?
I suspect that you're not. It comes down to the equation of whether it's worth anyone's time to crack the system. Well, as thousands of open source projects, white hat hobbyist hackers, and karma systems show, lots of people don't put a dollar value on their time. And given that the chances of being caught are minimal, well, why not give it a go? After all, it's only avoiding a penny a time. Who can that hurt?
Any popular micropayment system will (I suggest) be defrauded, and the costs will come right out of the payment backer's pocket. We've seen how PayPal deals with that; ignore it. Don't answer the 'phones. Freeze the account, and spend the money in it. With micropayments, who's going to even bother complaining? And if they do, how much are they going to have in their account? $5? It's barely even worthwhile seizing that, and not worthwhile at all if you have to send or even read a letter.
There is simply no compelling reason for anyone to manage micropayments, other than as a tool of desperation to prop up a flagging or non-existent business model (*cough* slashdot *cough*). There's precious little profit to be made from it, and a lot of opportunity to be scammed so badly that you won't even realise that you're bankrupt until you total the figures at the end of the year and find out that most of your payments came from Mr M. Mouse.
I suspect that it's good old fashioned economics that are stopping any of the big financial institutions from implementing mi
Re:Superman III (Score:4, Funny)
Re:Fractions of a Penny (Score:2)