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The Almighty Buck Encryption Security Software

The March Towards Micropayments 224

Posted by timothy 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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The March Towards Micropayments More

The March Towards Micropayments

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  • Subscription-based websites (Score:5, Interesting)

    by SIGALRM ( 784769 ) * on Monday June 28, 2004 @10:41PM (#9557391) Journal
    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 [w3.org] provides some interesting info.

    • discount schemes for frequent users of a site

      Interesting point, but slashdot [slashdot.org] is kinda already somewhat of that model isn't it?

    • Re:Subscription-based websites (Score:5, Interesting)

      by irokitt ( 663593 ) <archimandrites-iaurNO@SPAMyahoo.com> on Monday June 28, 2004 @11:02PM (#9557488)
      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.

    • Re:Subscription-based websites (Score:4, Informative)

      by bcrowell ( 177657 ) on Monday June 28, 2004 @11:22PM (#9557564) Homepage
      I may not be getting a FP here, but I do seem to be getting the FP by anyone who's read the article. The article isn't about subscription-based web sites, and it's not about paying for a page view. They examples they give are:
      • 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.

      • Re:Subscription-based websites (Score:5, Insightful)

        by dnoyeb ( 547705 ) on Tuesday June 29, 2004 @06:25AM (#9558704) Homepage Journal
        No its pretty unreasonable. The reason people first bought Atari systems was because they didn't have to put in a quarter for each play. Then people realized that computers could play the same games, but also get lots of other important things done.

        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.
        • 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.

          You're trolling, right? Fine. I'll take the "informative" karma.

          Perhaps the parent should have said "arcade game". From the article: One early customer is Incredible Technologies Inc., a manufacturer of coin-operated video games like the Golden Tee golf game. It has selected Peppercoin 2.0 to process credit card transactions in its future lineup of games, which will be able to take credit
    • I wonder if the folks at Microsoft are considering Passport as a micropayment vehicle for subscription-based websites?

      I'm sure that was part of the whole "big picture". I'd be willing to bet that they'll start bundling a few bucks worth of micropayment into every unique Windows license. This gets everyone over the initial ramp-up and into the premium content. Kinda like the drug dealer business model. The first ones are free.

      As much as we all dislike Microsoft, I do think that they are needed to get

    • Re:Subscription-based websites (Score:5, Insightful)

      by halowolf ( 692775 ) on Tuesday June 29, 2004 @12:03AM (#9557697)
      The thing about the micropayment system that worries me is making sure that consumers get what they actually pay for. The internet is hardly what I would call a reliable medium for on demand payment processing.

      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.

      • This is a significant problem - especially if micropayment systems are made as easy to implement as, say, the google adwords system.

        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
      • Bitpass, which I use for my audiobook project, has a way for customers to appeal for their money back, and, since the ability to download won't expire until a set number of days has passed, a user can contact me with a problem and I'm able to fix it with time to spare.

        That Bitpass's payments are anonymous requires an extra step on the spender's part, though. If someone emails me because he or she didn't get the item, I'll just ask him or her to log into Bitpass and get the timestamp for the item, and then

      • Re:Subscription-based websites (Score:4, Interesting)

        by TyrranzzX ( 617713 ) on Tuesday June 29, 2004 @08:02AM (#9559094) Journal
        Or worse, if you visit some of the worse websites on the internet, you'll find that mabye they'll just refresh a frame or something, charging up a few bucks on your card.

        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.

  • reply (Score:5, Funny)

    by celeritas_2 ( 750289 ) <ranmyaku@gmail.com> on Monday June 28, 2004 @10:43PM (#9557400)
    I'll pay you $0.0002 to think up a more clever reply than this!

  • This means that "My 2 cents worth" (Score:5, Funny)

    by Anonymous Coward on Monday June 28, 2004 @10:43PM (#9557404)
    ..will be big money rather than chump change.
    • It would REALLY add up if we could get micropayments for reading Email. Seriousely, all the discussion so far is about web sites, but applying micro-payments to Email might be kinda interesting, although I can see some real challenges in applying - for instance, who pays when your single Email to a list is exploded to a thousand folks, who is "collection authority", how do you set your thresholds (something for spammers/unknowns, zippo for friends/family/etc.)

      But BOY, if the spammers had to pay two cents

      • I agree, but I deal with people every day that have trouble turning on a computer and using basic e-mail, let alone trying to figure out some crazy new fangled micro payment system in addition to outlook.

        Or god forbid... several competing crazy micro payment systems specifically designed for e-mail. I just don't think the Joe user demographic is anywhere near ready for this.

        But if you could come up with something that's as widely used and accepted as Paypal, you might be on to something. Otherwise, you're

  • if slashdot starts charging this (Score:4, Funny)

    by stroustrup ( 712004 ) on Monday June 28, 2004 @10:52PM (#9557439) Journal
    the first post guys will go bankrupt!
    • If you read an article or a comment on slashdot and you reply to it, then you're actually paying by spending some time to contribute to Slashdot.

      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)

      by swordboy ( 472941 ) on Monday June 28, 2004 @11:49PM (#9557653) Journal
      the first post guys will go bankrupt!

      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.

  • technology 'maturity' (Score:5, Insightful)

    by CAIMLAS ( 41445 ) on Monday June 28, 2004 @10:54PM (#9557450)
    The acceptance, or maturity, of a technology can not occur without there being a desire or perceived need for it by the consumer. If there is no need, infinite supply (as is theoretically possible with such a thing as digital services) is meaningless, as people will still not use it.

    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 $ .01 or so for every slashdot article which someone gets before the rush/premium members.

    • Re:technology 'maturity' (Score:3, Interesting)

      by igny ( 716218 )
      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.
    • 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.
    • The system I use is mostly beneficial because 1) it allows payments as small as 1/10th a cent and 2) because it charges neither the vendor or the customer any fees and 3) it's much easier to implement than most payment systems and 4) it allows easy management of what funds are released to whom. I use it for online auctions, pay-per-view content, buying from my online store, etc.

      Yes, it'd be good for porn sites but it's also good for so many other things. Really credit cards are something of a hassle for bo

    • I'm suprised no one has mentioned BitPass [bitpass.com] 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 databas

  • Ho hum (Score:5, Insightful)

    by gmhowell ( 26755 ) <gmhowell@gmail.com> on Monday June 28, 2004 @10:55PM (#9557455) Homepage Journal
    Micropayment, macropayment, blah, blah, blah. Some things are worth paying for, others are not. Until and unless MC and Visa get into the act, these things are unlikely to bear much fruit. Some, yes. Enough to get all giddy about? Hardly.

    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?

  • Micropayments are a nice idea but... (Score:2, Insightful)

    by Anonymous Coward
    I don't think will work on a grand scale. It's technically feasable and probably would work great if everyone's mind-set was different. However, I think most people will instantly find them annoying and feel they are being "nickeled and dimed". I would rather sign up for an unlimited service on a monthly charge than a micro-payment based system. Even if under micro-payments I would spend say $3 - $5 / mo and unlimited would be $10-$15. Then I wouldn't feel the need to be jewish with what I'm doing and
    • Then I wouldn't feel the need to be jewish with what I'm doing . . .

      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.
      • By using a terrible word many, many times, its meaning is somewhat trivialized. Witness "Motherfucker".

        Anyway, that slur is not completely without merit either. WASPs tend to be a bit hipocritical, jews tend to be good with money, blacks like to think of themselves as victims (sometimes rightly so) - at least in my limited experience and many hours of indocrination by the entertainment industry.

        Why not be a bit honest and say that some stereotypes hold merit, but not on a personal scale?
    • Perhaps that's the very thing that micropayments would spur on. If everything could be reduced to micro-payments, perhaps most people would opt to pay some sort of flat-fee for access.

      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

  • ignoring micropayment concept problems (Score:5, Insightful)

    by SuperBanana ( 662181 ) on Monday June 28, 2004 @10:56PM (#9557457)
    The biggest obstacle to using credit cards for micropayments is the cost of transaction processing

    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.

    • indeed...part b of your argument is actually used by a harvard business school prof [hbs.edu] to argue against the RIAA's claim that free music piracy hurts sales. as is said in the article, many online sites appeal to groups that are "money-poor but time-rich." indeed slashdot fits the bill.

      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.
    • In fact, the cost of the *time* a user has to spend to pay for page view is more than the cost of the page view itself.
    • I had always understood "nickel and dimed" to refer to being forced to pay for a lot of little things that you expect to get for free, usually included with some other payment. A couple of cites from Google:

      "Watch you bill, they tend to 'accidentally' add extra items when there is a large party. Also, don't expect a free piece of cake for the birthday boy, regardless of the size of the bill. Felt nickel and dimed when the bill came."

      "I felt nickel-and-dimed by CellularONE's options package--a $35/month p
    • You're right. When micropayments are less than a penny, I'm not going to pay attention to how much I'm spending until drop from a heart attack when the bill comes at the end of the month.

      Dad: "Billy! What's the $389 bill from Slashdot?!?!"

      Billy: "Huh? No way it can be that big! They only charge 0.005 post!"

    • 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.

      Bobs remaining 10% of users provide him with a small but appreciable revenue stream.
      Jane notices this, and as she is short of money she too moves to micropayments, and loses most of her readers aswell as many she earned from Bob.... but she's earning a few $dollars a month.
      Sally and Joe see a MASSIVE surge in readership, and Sa

    • a)People HATE getting nickled and dimed- hence the very origin of the term!

      Got any numbers to back this up?

      From where I'm sitting, I see a huge industry using micropayments, that's paying through SMSes, stuff like that. It works very, very well. If it is convenient enough, people will do it.

      Fact is, micropayments allready work, just not on the Internet.

      b)For websites and the like, people will simply seek out free content which is available in quantity. Bob starts charging micropayments for h

    • 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.

      Don't know much about webcomics do you? Several webcomic artists use a donations scheme and manage to get quite a few donations. Some actually charge for their content and guess what. People pay it. Some webcomic artists are a
    • I was thinking along the same lines, but extending it a bit more. What happens when spyware infects your PC and starts spewing popup ads everywhere, charging you for the privilage? Or you mis-type a URL and get a hundred popup ads? I realise the former is very unlikely to happen with non-Windows users, but let's face it: most consumers today run Windows with IE, don't use Windows Update, and have never heard of a firewall.

  • time to start... (Score:3, Funny)

    by tsunamifirestorm ( 729508 ) on Monday June 28, 2004 @10:57PM (#9557463) Homepage
    ...the obligitory "Office Space" quotes amount micropayments.

  • this COULD work (Score:4, Interesting)

    by spacerodent ( 790183 ) on Monday June 28, 2004 @10:57PM (#9557464)
    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.
    • I would hate to then lose my wallet containing said $100 card in it, since it would likely be treated the same as lost cash. A micropayment system that allowed me to spend cash throughout the month, and then billed my Visa at the end of that month would suit me fine. That said, I'm a cheapskate, so would probably just find a free version of the info somewhere online. Why pay for someone to package it nicely, when some 1337 h4x0r has done up a crummy looking speeeelling eros fueled page? Peer to peer is the

  • credit cards and gambling (Score:3, Interesting)

    by swimfastom ( 216375 ) on Monday June 28, 2004 @10:58PM (#9557471) Homepage

    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.

    • Online gambling doesn't involve micropayments, it involves amounts essentially the same as you'd use in daily transactions -- $25 here, $50 there. That said, I won't throw money at any of them even if I trust the host's servers implicitly, because there is no effective way to prevent people from communicating outside their channels to share information they shouldn't be sharing. Collusion is awfully hard to stop.

      How can you keep players from yapping at each other on cell phones? You can't. That doesn't me

  • I wonder if this business model would work? (Score:3, Interesting)

    by Anonymous Coward on Monday June 28, 2004 @11:01PM (#9557486)

    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!"

    • 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.

      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)

    by ronys ( 166557 ) on Monday June 28, 2004 @11:03PM (#9557492) Journal
    Clay Shirky [shirky.com] makes a strong case [shirky.com] why micropayments haven't taken off, and probably won't in the forseeable future. In short, the difference between "free" and "only $0.005" is much larger than only half a cent - it's a change in the mindset of the reader. The article also references more academic papers describing the weaknesses of micropayments.

  • this creates a problem (Score:5, Insightful)

    by PrinceAshitaka ( 562972 ) on Monday June 28, 2004 @11:09PM (#9557515) Homepage
    Do we really want to go towards a cashless society. I agree this micropayment system is far from it but this system will lead to the owners of VISA to have an awesome amount of power. Imagine , what would happen in a cahsless society where Visa get a percent of every transaction taking place.

  • Sorry to pick nits.. (Score:3, Funny)

    by suso ( 153703 ) on Monday June 28, 2004 @11:10PM (#9557519) Journal
    but wouldn't a micropayment be something like $0.0000001 per page view.
  • Like I've written time and time again, I believe the solution to the micropayments problem is very simple. It should work something like this:

    There are three parties to a micropayment transaction:

    1. The party receiving the money.
    2. The bank, credit card company, or other intermediate party facilitating the transaction.
    3. The party paying the money.

    The way it works is relatively simple. Party 3 does something which requires a micropayment. This could be $1.00, $0.10, or $0.001. Either way, the procedure is

    • A system similar to this is already operation in six countries. It is called Fundamo, and was originally developed for mobile payments across the GSM network. The architecture, and an implementation, developed by Fundamo are licensed to network operators who partner with banks to offer this service on their networks. The company was founded in 1999 in South Africa, is backed by two of the biggest financial institutes on the continent, and has numerous patents to its name. Its system will be rolled out i

  • Complete idiocy (Score:5, Insightful)

    by duffbeer703 ( 177751 ) on Monday June 28, 2004 @11:26PM (#9557580)
    The problem with micropayments is the "micro". Payments are payments.

    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:2, Interesting)

      by Anonymous Coward
      A large part of MasterCard's transaction cost is the risk that the buyer will challenge the charge and MasterCard will have to arbitrate, and in the worst case, absorb the cost. That risk is much smaller for tiny transactions, both because they're smaller amounts and because nobody would bother to challenge them.
      • Did someone just say "MasterCard" and "absorb the cost". I don't think so. Any disputed charges are ultimately eaten by the seller (vendor/retailer/etc.) not MC, if I am not mistaken. Or indirectly by fees charged to everyone.

        I don't think their risk is really very high. Maybe their risk of making a very high rate of return OTOH....

        • Re:Complete idiocy (Score:3, Informative)

          by thogard ( 43403 )
          MasterCard only provides the network. The banks are the ones who "absorb the cost" and they do that by billing the merchant for most types of orders (on the net) and increased fees for consumers for other types of fraud. MasterCard takes something like .08% of the transaction value for their charge of doing the transaction. The banks on the other hand take 1.5% to 3.5% for normal clients plus $.20 per transaction charge plus your monthy fees.

          The reason micropayments won't work is that transactions of any
      • No. There are two parties at work when you use a credit card, the issuing bank and the payment network. (Except in the case of American Express)

        The payment network makes money from levying transaction fees on each and every transaction. The issues bank makes money on an additional transaction fee and off of the suckers who pay 15% interest.

        The issuing bank, not the network (MasterCard, Visa) is responsible for the liability for handing arbitration and chargebacks.

    • Re:Complete idiocy (Score:3, Insightful)

      by EvanED ( 569694 )
      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.

      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."

  • Patent Pending (Score:3, Insightful)

    by agentZ ( 210674 ) on Monday June 28, 2004 @11:26PM (#9557585)
    From the article: The cost reduction is possible, he said, because of a patent-pending method of lumping together individual transactions into one transaction to reduce the cost to the merchant.

    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)

    by mlg9000 ( 515199 ) on Monday June 28, 2004 @11:26PM (#9557587)
    Micropayments = Microvisits

    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)

    by Anonymous Coward on Monday June 28, 2004 @11:35PM (#9557609)
    but may not solve the need for truly "micro" payments, like paying $.005 for a page view."

    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)

    by H0NGK0NGPH00EY ( 210370 ) on Monday June 28, 2004 @11:45PM (#9557643) Homepage
    Obligatory Penny Arcade Link [penny-arcade.com]

  • how well does micropayments work for slashdot (Score:3, Interesting)

    by bear_phillips ( 165929 ) on Tuesday June 29, 2004 @12:07AM (#9557710) Homepage
    Anyone know how well slashdot does with micropayments?

  • Micropayments == Ads (Score:3, Interesting)

    by KalvinB ( 205500 ) on Tuesday June 29, 2004 @12:12AM (#9557731) Homepage
    If you think your content isn't worth changing a worthwhile amount of money ($1.00 or more) for then you should just put up ads (AdSense). Or if you just don't want to charge visitors for access. Nothing is worth the hassle of doing an electronic transaction for a few pennies. Google AdSense is built for doing very small transactions and it requires no work on the visitors part except to be interested enough in an ad to click thru.

    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

  • specific prior art (Score:2, Interesting)

    by Anonymous Coward
    I can't believe they patented this.

    I think that parts of Amazon's loathesome "1-click" ordering is actually prior art. If you have 1-click turned on, it will not process your order for a couple of minutes. This allows you to order several items - one after the other - and they will be combined into a single order. This way you only pay for credit card overhead and shipping on the entire order (and not for overhead & shipping on each individual item).

    I think the 1-click patent is absolutely worthless i
  • As much as I like it, I also fear it. I fear the end to the vast amount of free resources the internet has to provide. Yes I'd be great to be able to easily tip and contribute to projects and good resources ... but, what will a day of surfing cost when everyone is asking for $0.25 ?

    Lets hope this can cut into the Visa / Mastercard Manopoly???

    Yahh right ... If it catches on to any extent they will be there to dominate it..

    Security Cameras [completecctv.com]

  • iTunes (Score:3, Insightful)

    by mclove ( 266201 ) on Tuesday June 29, 2004 @12:21AM (#9557762)
    The cost reduction is possible, he said, because of a patent-pending method of lumping together individual transactions into one transaction to reduce the cost to the merchant.

    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)

    by KalvinB ( 205500 ) on Tuesday June 29, 2004 @12:22AM (#9557768) Homepage
    "The cost reduction is possible, he said, because of a patent-pending method of lumping together individual transactions into one transaction to reduce the cost to the merchant."

    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)

    by MalikChen ( 736716 ) on Tuesday June 29, 2004 @12:37AM (#9557820)
    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.

  • Micropayments will come, if you like it or not! (Score:5, Insightful)

    by pjay_dml ( 710053 ) on Tuesday June 29, 2004 @01:02AM (#9557882) Journal
    If the idea of selling ringtones had been posted here on Slashdot, I am pretty sure we would hear the same arguments : "won't work, no one will pay money for something like this"
    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....
    • I am almost certain you work for one of those shitty companies rushing to catch the last gold of the Fools Rush.

      Ringtones companies sell you a very specific thing: a ring tone for your damn annoying mobile phone.

      What is a website selling you? Pageviews? What is a pageview? How can make sure I am billed failry?

      In short I can't, and it would take only a few unescrupulous indivicuals to milk the uncertainity about this for all what is worth.

      Do people publicizing website want to charge for it? Then go ahe

  • Micropayments the other way around... User EARNS (Score:5, Interesting)

    by Calrain ( 610749 ) on Tuesday June 29, 2004 @01:27AM (#9557946)
    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...

  • No Go (Score:3, Interesting)

    by Julian Morrison ( 5575 ) on Tuesday June 29, 2004 @01:43AM (#9557997)
    Suppose I'm charged $0.005 per pageview.

    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.
    • Flaw with your logic: As the price of phone calls goes down, I worry less about phone charges. Yeah, I spend a few hundred bucks a year on phone calls. And I can point to 5 or 10 that either generated that sort of income or saved me hours of my own time, which I could then use for whatever I wanted.

      That's a micropayment structure that isn't broken. And I'm all for more such markets popping up if it gets me away from vendors thinking $5 is a fair price for an online article reprint. THAT is the idea tha
  • Peppercoin's website indicates that version 2.0 pays merchants exactly what they charged, instead of [...] which may or may not sum out to exactly the expected charges.

    NEWSFLASH: New payment method actually pays the charged amount!

    How on God's green earth can this be news? Much less, how can this be presented as revolutionary and patentable?

    Exactly what are these people smoking?

    Did I suddenly wake up in 1999 without anyone telling me?

  • Browser integration (Score:5, Insightful)

    by dargaud ( 518470 ) <slashdot2@nOSpaM.gdargaud.net> on Tuesday June 29, 2004 @02:06AM (#9558066) Homepage
    FOr micropayment to gain wide acceptance, there needs to be an integration within the browsers. I researched that for a while because my website has some value but not enough to warrant pulling a CC out. Imagine if you get to a site and you have a little icon on your task bar that start flashing a bit for attention. You pass your mouse above and it asks: "do you agree to pay 0.005$ per page while you visit this site ?" With an optional cgi being called back on the site in case you aswer yes. And somewhere within the browser options lie the CC reference (or paypal or whatever). It would make it convenient to use, which is the main things missing from all current micropayment choices. The time it takes to enter registation, value, references, etc... is not worth 0.005$.

  • a solution looking for a problem? (Score:5, Interesting)

    by sdedeo ( 683762 ) on Tuesday June 29, 2004 @02:24AM (#9558122) Homepage Journal
    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.

    • 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.

      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

      • web comic people are going with the old -- and apparently very function -- methods.

        Indeed. The old methods work for some people. However, the world isn't on-size fits all. Most TV is ad-supported as well, but not ALL of it. The fact that one method is working for many people does not mean that nothing better should ever be worked on.

        I suppose I'm still waiting to see the problems described adequately, and laid out so that we can see why current methods are failing, why the real-world solutions can't
  • A lot of people here are complaining about paying for something being too much of a hassle. Indeed, I don't think micropayments are going to work if they require user interaction. But it doesn't have to be that way.

    Consider phone charges work. You pick up the phone, dial the number, and you can talk as long as you want. The bill is calculated and sent automagically.

    There is no reason micropayments couldn't work the same way. You get to use the web exactly like you do now, except that you don't have to log

    • Consider phone charges work. You pick up the phone, dial the number, and you can talk as long as you want. The bill is calculated and sent automagically.

      If I'm talking to someone long-distance, I don't talk a long time. I say what I want to say as quickly as possible, and I expect the person at the other end to be equally brief. OTOH, if it's a local call, the cost is the same whether I talk 1/2 a minute or 2 hours, so I don't pay attention to the length of the call. Just knowing that the meter is tick

  • Micropayments to view web content will not work. The thing is, how would you know that something is worth paying for until you have read it???

    The future is here now. Slashdot and PocketPC Thoughts and any others have ads. When you subscribe, these ads can be turned of is you so desire and you also get extra benefits. This is the way to run your site. I don't know how succesful somesites are, but PocketPC Thoughts had a bigger response then most did. One other thing that PPCT did was make mobile postin
  • I would prefer a semi-universal tipping system based on micropayments. I hate subscriptions and have only subscribed to maybe one or two sites and I would hate to think that everytime I visit or refresh a page, I'm being charged for it.

    But, if I read a good article or blog post, or find a really useful website, or even a funny or creative one, I would definitely use a service that allowed me to tip.

    There are problems with this, of course. The big one being that unless everyone agreed to use the same tip
  • I've heard of "death by a thousand cuts", but this will turn into "bancruptcy by a million micropayments"
  • It looks like they still want you to download a windows application as the 'PepperPanel'. So your micropayments already include the MS tax.

    I also didn't like the way that you were expected to find this out after you'd given them your credit card details.

  • Who can pay (Score:3, Interesting)

    by Invalid Character ( 788952 ) on Tuesday June 29, 2004 @10:58AM (#9560888) Journal
    As someone who isn't legally an adult, I can't get a credit card and can't buy a lot of things online or offline for that matter. I'm sure that there are also some people who don't have bank accounts or credit cards and still read online comics and play online regularly. This micropayment system would potentially exclude them and others.

    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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