Whatever Happened to Micropayments?

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.

Payment System

[JSkills]

I am part of a group that actually runs a website that charges a subscription fee for the premium content on the site. We looked at (and tested) a number of payment models.

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 ...

Try Xanadu

[Creepy Crawler]

Xanadu [xanadu.com] was the first system for reverse linkable, micropayment ready, Super-HTML system.

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 .0002 cents for accesses to debian mirrors? I certainly would IF IT WAS EASY.

Xanadu also provided for searchable media: An mpeg movie is linked from IMBD to a section of frame 23508-24003 on the movie servers. The content people then would access a porportinate cost to that snippet. Who wouldnt agree to pay 4cents for that access?

And now for those whining that that network wouldnt be "All Pay", if you create content, you can get money too. It's like a payment counter that goes both ways rapidly.

Instead the HTML One-Way links, dead links, leeches, and no accountability system started. And it started ONLY because Xanadu was closed, secret system then (80's-early 90's), and HTTP/HTML was Public, known system.

This has been answered!

[sootman]

And the answer is, they will *never* happen. read all about it [openp2p.com] here. In that article, Clay says so much, so perfectly, that I won't quote any of it--just go and read the whole thing. OK, I can't resist. One of his points is micropayments have too much "user overhead"--you have to make a descision for literally every penny you spend, and that alone makes it not worth it. As he says, the user is getting conflicting messages: "This is worth so much you have to decide whether to buy it or not" and "This is worth so little that it has virtually no cost to you."

Read this article about micropayments first

[Richard W.M. Jones]

Before you go off and invest large sums of money in more daft micropayments schemes, you might want to read this article about why consumers don't accept them:

http://www.openp2p.com/pub/a/p2p/2000/12/19/microp ayments.html [openp2p.com]

Rich.

Re:Micropayments with the iTunes Music Store?

[henele]

I read from one source (which could be completely unreliable) that Jobs and Co. had discussions with the banks to cut down their fee, in order to make the whole thing feasible..

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?

[Bloodshot]

I remember reading about this system. What they do is actually pool your mico transations and charge at the end of the billing period instead of instantly charging you when you make the purchase. Apple is gambling that you'll buy enough stuff during the billing period to make the transaction fee charged to Apple palatable.

Re:Missing the Obvious

[Eccles]

The problem with the government doing online currency, at least in the US, is that by law any currency that comes from the Treasury Department MUST be accepted as legal tender in ALL transactions.

Interesting, but not true. There are stores (such as Scan, at the Columbia, MD mall) that do not take cash. It may be different if I already have a debt, and attempt to repay in cash, but that does not mean that someone must always be willing to take cash for a good or service.

Re:Missing the Obvious

[billtom]

The problem with the government doing online currency, at least in the US, is that by law any currency that comes from the Treasury Department MUST be accepted as legal tender in ALL transactions.

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 policies on whether or not to accept cash...