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Whatever Happened to Micropayments?

CmdrTaco posted more than 10 years ago | from the are-we-there-yet dept.

News 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.

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318 comments

micropayments on /. (4, Funny)

gokubi (413425) | more than 10 years ago | (#6498621)

I still believe that single penny transactions will revolutionize the net.

Plus, a micropayment system on /. would allow us to quantify the value of the elusive first post:

320 refreshes waiting for next story
1 hit Reply page
0 hits to preview page (and it shows)
1 hit submit page
75 refreshes to see if FP gets modded down

at $0.01 per Slashdot page hit, an FP would be worth $3.97.

Re:micropayments on /. (1)

jkrise (535370) | more than 10 years ago | (#6498656)

320 refreshes waiting for next story
1 hit Reply page
0 hits to preview page (and it shows)
1 hit submit page
75 refreshes to see if FP gets modded down


Er... how much for +1 Karma?
Guess /. can make a pile by selling karma for just a penny. MS and SCO astroturfers would prolly shell out a billion.

Your karma is no match for our Evil Moderators!
-

Well... (2, Funny)

Prince_Ali (614163) | more than 10 years ago | (#6498865)

They would have to agree to an expense account for buying Karma. I'm not cutting into my profits for a few extra points when... I've probably said too much.

Funniest geek joke ever!!! (-1)

JismTroll (588456) | more than 10 years ago | (#6498624)

An oldie but goodie:

Why can't Nerds tell Halloween from boxing day?

Because 31(hex) == 25(dec)! LOL!!

- JT

I dont get it... (3, Insightful)

mgcsinc (681597) | more than 10 years ago | (#6498625)

The mere fact that the article reports on two different systems highlights an enormous problem in the world of micropayments: competition creates more problems that it solves! The beauty of a micropayment system is that one doesn't have to keep an account with a single provider, and oftentimes these providers are small enough so that an account would be senseless anyway; the issue created, however, is that consumers moving from one provider to the next are going to need a common ground for payment between them. Although this is what a micropayment service is supposed to be, a flourishing of different micropayment systems will mean consumers will have to stick to one and be limited in where they can spend, or go through the hassle (and probably expense) of creating accounts with many, partially defeating the original purpose. What do I see happening? 1. A single system gains the monopoly, and micropayments start to actually look worthwhile. OR 2. Consumers just continue to resort to big name information providers which they create accounts with, maintaining the status quo. If the e-coins system I was a member of earlier in theis decade is any indication, I see the latter as the much more likely of the two evils to occur...

Missing the Obvious (4, Insightful)

Arbogast_II (583768) | more than 10 years ago | (#6498715)

Governments are supposed to be responcible for maintaining a robust and useful currency system. Supplying a robust currency system should be a slam dunk, no brainer extension of the current monetary system. Online, government secured currency is what is needed.

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 (1, Insightful)

Anonymous Coward | more than 10 years ago | (#6498840)

Uh, yeah, because if the government does something, it's free!

Everything on the Net is Free (1)

yintercept (517362) | more than 10 years ago | (#6498928)

The even bigger obstacle to micropayments is the absurd notion that everything on the net is free. Paying even a nickel to listen to a song is an act of oppression. A band asking its fans to paypal a dollarto help cover the download costs for an album seems to create more indignation than dollars.

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 net.

Re:Missing the Obvious (5, Interesting)

araven (71003) | more than 10 years ago | (#6498874)

THANK YOU! It is obvious, and it's been a problem for a while now. Online transactions aren't the only problem. We have a plastic currency society now, paper money is all but obsolete (though IMHO there will always be a place for it). In order to function now, it is arguably necessary to have a credit or debit card, yet private companies control who can and can't have one, and on what terms. It's just the same as if one person could use a $20 bill free of charge because they're "good" at using money, but another person had to pay $1 out of every $20 to someone else because they're "bad" at using money, and then there's the person who simply isn't allowed to use money at all because he doesn't have much to start with and he's been very bad at using it correctly in the past!

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 (3, Insightful)

Zathrus (232140) | more than 10 years ago | (#6498890)

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.

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 in "useless" denominations, such as the penny, the pence, the cent (EU), and 1 Yen.

The issue is not the currency system. The issue is that micropayments have overhead that vastly outweigh the actual payment. This overhead is in accounting, and it's not going to magically go away. You must show where ever penny comes from for at least two reasons - 1) The government wants to know, so it can tax you. 2) The consumer wants to know, so that you are accountable and they can get a refund if they were overcharged.

There's other reasons to keep track of all the pennies too - like figuring out if you're going to make money or not, doing trending, etc. But really the biggest issue is #2 -- and if you're not accountable to me, your customer, then screw you -- I won't do business with you then.

All of the micropayment systems I've seen have tried to reduce the accounting overhead merely through reducing billing overhead -- consolidate users by financial institution and request a lump sum. It still doesn't resolve the issue that the bank, credit union, etc. will need to take $.05 from account 1, $.08 from account 8, etc. And this is what kills micropayments. And will continue to kill them for the forseeable future.

Unless, of course, you don't have a problem with businesses not being accountable to their customers.

I would guess Option 1. (1)

spybreak (636509) | more than 10 years ago | (#6498747)

Simpay is probably a candidate for this, founded by Orange, Telefónica Móviles, T-Mobile and Vodafone:

http://www.simpay.com

Defining the competition (1)

yintercept (517362) | more than 10 years ago | (#6498861)

Monopolies are not the answer. This exact same argument was made in the OS market that there needed to be one monopoly that controlled the operating system, so that all the different software vendors would be able to have a common platform for their programs.

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 thinking. Companies like cybercash went into the business with the contemptuous notion that they would first spend hundreds of millions of dollars of investors capital to create a monopoly, then when they had a monopoly, they would be able to bring in the paradise of micropayments.

These large investor capital fed monopoly dreams undermined other more promising approaches to the problem, then exploded in dot com fashion.

There is a lot of merit to what you say about the consumer being confused by multiple solutions.

I suspect the ultimate solution would be for a standards committee to define an interface. With an established interface you could then have competition among smaller companies that plug into that interface.

The monopoly recipe, however, is a guaranteed path to failure.

Fractions of a Penny (0)

m_evanchik (398143) | more than 10 years ago | (#6498632)

Even single penny transactions are too big. What will really matter are fractions-of-a-penny payments. Things will really add up in volume.

What happened? (2, Interesting)

Anonymous Coward | more than 10 years ago | (#6498638)

They were monopolized and price-fixed by ebay, just like online auctions were. Have you looked at the prices for paypal and ebay auctions recently??

--
1-800-759-0700

Re:What happened? (0)

Anonymous Coward | more than 10 years ago | (#6498892)

PayPal is not, and never was, a micropayment solution. Nor have they gone through life without competition; heard of the Amazon honor system?

The problems with micropayments aren't about the current state of the market; there are basic technical/economic issues that have to be resolved to make a micropayment system work.

Re:What happened? (1)

Anonymous Cowtard (573891) | more than 10 years ago | (#6498898)

Price-fixing? How is eBay responsible for price-fixing? It's the seller who determines their opening bids, not eBay. Can't hold eBay responsible for a seller's inflated vaule of their items for auction.

Re:What happened? (2, Interesting)

psxndc (105904) | more than 10 years ago | (#6498934)

Amen. I sold my online Magic cards a couple months ago. I sold them all for $325 USD ($180 for one lot, $145 for another). Ebay took like $20 for the listings, Paypal took about $12 for the transactions (yes, even for a verified paypal buyer). All in all, Ebay and Paypal took about 10% of what I sold the cards for. Yes, their services provide a value, but 10% seems a little steep. I'm surprised Coinstar hasn't started an online presence. After seeing what it costs to sell stuff on Ebay, and to receive money via paypal, it makes the "Get rich on Ebay!" spam even less believeable.

psxndc

GNOME Armageddon (-1, Offtopic)

Anonymous Coward | more than 10 years ago | (#6498642)

dear reader the gnome armageddon has started,

first of all i want to clarify that this text was meant to be a source of information otherwise i wouldn't have spent so much time into writing it. belive me it took me a couple of days writing this text in a foreign language. even if you don't care at all for gnome, you may find some interesting information within this text that you like to read. please try to understand my points even if it's hard sometimes, otherwise you wake up one day and feel the need to switch to a different operating system.

on the following lines i'm trying to give you a little insight of the gnome [gnome.org] community. the things that are going on in the back, the information that could be worth talking and thinking about.

many of us like the gnome desktop and some of us were following it since the beginning. gnome is a promising project because it's mostly written in C, easy to use, configurable and therefore fits perfectly into the philosophy of u*nix. only to name some of its advantages.

unfortunately these advantages changed with the recently new released version of gnome. the core development team somehow got the idea of targeting gnome to a complete different direction of users. the so called corporate desktop user. in other words they're targeting people that aren't familiar or experienced with desktop environments. usually business oriented people who are willing to pay money for getting gnome on their computers.

having this new target in mind, the core development team mostly under contract by companies like redhat [redhat.com], ximian [ximian.com] and sun [sun.com] decided to simplify the desktop as much as even possible by removing all its flexibility in favor of an easy clean simple interface to not confuse their new possible customers. so far the idea of a clean easy to use desktop is honourable.

some of the new ideas, features and implementations such as gconf [gnome.org], an evil windows registry like system, new ordering of buttons and dialogs, the removal of 90%-95% of all visible preferences from the control center and applications, the new direction that gnome leads and the attitude of the core development team made a lot of users really unhappy. these are only a couple of examples and the list can easily be expanded but for now this is enough. now let me try to get deeper into these aspects.

you may imagine that users got really frustrated [osnews.com] because their beloved gnome desktop matured into something they didn't want. during the time, the frustration of a not less amount of people increased. more [gnome.org], more [gnome.org] and more [gnome.org] emails arrived on the gnome mailinglists where users tried to explain their concerns, frustrations and the leading target of GNOME.

but the core development team of gnome don't give a damn about what their users are thinking or wanting and most of the time they come up with their standard purl. the reply they give is mostly the same. users should either go and 'file a bug' at bugzilla [gnome.org] or the user mails are being turned so far that at the end they sound like being trolls or the user feedback is simply not wanted. whatever happens the answers aren't really satisfying for the user. even constructive feedback [gnome.org] isn't appreciated.

if you gonna think about this for a minute then things gonna harden that they are directing into the commercial area. the core development team actually don't care for the complaining home user. it's more important for them to reach the customers with the cash. it seems that this has been told to them by the company leaders. everything about gnome has been decided already, a way back or direct communication isn't possible. don't get trapped by sentences like 'we listen to our users'. they listen to you - yes, to make funny silly jokes about you afterwards.

i thought that everything was build up on friendship, build on programming for fun, build on understanding each other. but the reality looks like it's all for the big money. the cash is what matters everything else is a lie and a dream. time for people to wake up.

not long ago they threw one of the most important long year core developer martin baulig [gnome.org] out of team. a guy who worked really hard on getting gnome into the right direction. a nice friendly person who put all his time into gnome. but narrow minded gnome elites such as havoc pennington [pair.com] were responsible that he left the gnome project. the trouble and the pressure that was put on him was to much.

with the new gnome desktop a lot of user interface changes happened such as button reordering [gnome.org]. needless to say that this confuse people who are used to the 'right' button ordering for ages. even our fellow linux guru alan cox [gnome.org] wasn't thrilled about this idea. but the gnome elites such as havoc pennington, seth nickell, calum benson and dave bordoley knew it better. why following the road of any other desktop that exists ? why not doing something that don't confuse their users and still stay usable ? well it seems to be too easy. gnome needs to be different than anything else so they changed the button order which was one of the reasons that users became unhappy. they said that there was a hard fight about this and the decision was made to change the buttons. but i belive they simply copied the behaviour of macos because most of the gnome developers use a macintosh as either laptop or desktop. sad that they forgot to keep in mind that users tend to mix applications and that this will lead into weird button searching and clicking.

but as if this wasn't enough the same people decided that the new gnome human interface guides [gnome.org] were the ultima non plus ultra in human interface guides. the announcement contained informations that the kde usability people got initiated into it. unfortunately the kde people heard about it the first time [kde.org] when seth nickell went to the kde mailinglist which happened after the announcement. you can imagine that they got highly pissed off about this attitude. you can read more on this link [kde.org]. to summarize it, the kde people clarified that gnome should care for their own business.

the problem that came with the new interface guides was, that every little gnome hacker started to become an user interface expert over night. a lot of gnome programs that we like to use matured into a disaster over night. hackers that never programmed correctly for their life started to blindly follow the hype of simplification. for an example look what happened to galeon's interface [sourceforge.net] (pay attention for the last paragraph). even philip langdale a long year galeon hacker got highly indignant by the target that gnome leads and wrote this email [sourceforge.net] to the galeon mailinglist.

here another reason why users became angry. the elite assumes, that the user knows nothing about their system. you find a couple of heavily insulting mails on their mailing lists containing sentences like the quoted ones.

  • "the user don't know what a window manager is"
  • "the user don't know what themes are"
  • "the user don't know what a homedir is"
  • "the user can't compile a kernel"
  • "the user don't want to customize their desktop"
  • "the user shouldn't see preferences which purpose they don't know"
you may imagine that a lot of people are being offended by such lines because it's exactly these gnome users who are meant by these phrases. to read more such lines on the gnome mailinglists, simply click on this link [gnome.org] and grep in their archives. be said that most of these sentences are coming from havoc pennington.

such evil practices shouldn't be tolerated by the users and need to be fighted. u*nix users aren't stupid people. who actually gave havoc pennington the rights to decide what the user wants and what not ? various users [gnome.org] told him that people who use a u*nix like system are well aware of their capabilities dealing with such a complex system. there's a reason why people are switching from alternative operating systems. they want to learn, they want to use the full power of the system, they want to change everything they like.

to top all this, look at the future plans of nautilus [eazel.com]. the current maintainers got the idea of changing the whole nautilus concepts into an object oriented user interface design. you may be highly interested in reading the exact words of alex larsson's vision for nautilus' future direction by clicking on this link [gnome.org].

to summarize it, it's assumed that the user don't need to deal with his homedir or his whole filesystem because it may confuse him or because he don't understand it. the new concepts of nautilus should be that the user deal with symbols in the nautilus view. e.g. you get a cdrom symbol and by clicking on it you see the directory of your cdrom, you get a photo symbol and by clicking on it you get a list of all your pr0n pictures, you get a music symbol and by clicking on it you get a list of all your mp3's. you don't know where all these files are located because you don't deal with the bottom layer of your homedir or filesystem anymore as mentioned earlier.

the question is why are people that know nothing about their users, that know nothing about correct user interface design destroying gnome ? the users don't deserve all this specially those that backed gnome for all the years. even sun threw a bunch of so called user interface experts together and have them work on gnome. don't forget that sun are the creators of the common desktop environment [opengroup.org]. we don't need another cde clone named gnome. even havoc pennington author of the good user interfaces [pair.com] text isn't able to get his own written software following his rules.

not long ago there was an report about the 'two captains of nautilus' where the reporter (uraeus a gnome contributor himself) reported alexander larsson and david camp. you may imagine that such a report can't be taken serious because it's done by their own people. we here have a saying that sounds like this 'one crow doesn't hack the eye of another crow out'. now you can click on this link [gnomedesktop.org] and read more. it may be interesting to read the replies from various users all over the globe of what they think about gnome and nautilus in general (please pay attention to the listed ip's there). another nice and informative reading can be found by clicking on this link [gnomedesktop.org].

the fileselector problem was a long discussed issue in the gnome community. finally they came to an solution for this and have decided to go for this [coreyo.net] ugly fileselector instead going for this one [wanadoo.nl] which was developed by a free volunteer for a long time and in general looks and behaves better.

most users have no problems with the idea of keeping things simple and clean. removing some not needed preferences was indeed a good idea but it doesn't stop. people started to remove everything from their apps. you're forced to use dubious programs like gconf-editor which basically works like the windows registry editor, to tweak uncommented preferences. i don't think that this is an advantage. even the possibility to tweak preferences with an editor was taken away with that ugly implementation of gconf. all your preferences are stored in a directory tree with an unknown amount of *.xml files. even if you delete programs their keys are still remaining orphaned in these trees and finding them is like playing trivia. at the end it's worth a discussion if a system driven by a single home user needs such a registry like system. we didn't need such a system for over 30 years but the gnome development team got the idea copying one of the most retarded systems from windows to u*nix. not to mention that the copy is more retarded than the original.

it's a shame to see how such a nice desktop got thrown into the trash by such people. but there is a lot more behind the scenes that i don't know about. everything around gnome is a big marketing strategy. poor people are working the hell out of gnome for nothing and companies such as those mentioned above are getting the big cash. for sure you could say - go and fork gnome - but seriously how can you go and fork gnome ? such a big project which needs a bunch of people to keep the code alive and compatible. well you know it's all about open source the code is signed under the gnu/gpl or gnu/lgpl, you can't own it. even the companies are aware of this. but if you can't own the code - go and hire their developers. you can direct them like puppets in any direction that you - as company - like. exactly this is happening with gnome.

well you could easily come up and tell me to simply not use gnome and let them do whatever they like. well, you are right with that but things are more complicated nowadays. gnome is influencing a lot of third party projects such as xfree86 which recently added a lot of gnome components into their cvs repository. please know that with the next coming xfree86 version you get a lot of gnome components without even knowing it. code like, gnome-xml [xmlsoft.org], pkgconfig [freedesktop.org], fontconfig [fontconfig.org], xcursor and xft2 were mainly written by people who're heavily involved into gnome development. also the gimp is maturing more and more into getting the look and feel of a native gnome application. the cvs version of the gimp has a lot of gnome pixmaps inside and they are heavily working on integrate the gimp into gnome. if not today but the direction is sure and i fear the day this gonna happen.

it's ok that these things exist and it's ok to see xfree86 and the gimp are beeing hacked on. but please think about the people that don't like or use gnome. what about them ? why force them to have gnome components installed on their systems ? why can't gnome go the same way that kde went e.g. doing their own stuff without infecting other projects like aids. seeing more and more libraries and applications that were in no way related to gnome jumping on the pkgconfig boat which's really not needed. look what will happen to solaris, the world famous operating system on u*nix used by big companies and long years experts. they really plan to replace cde with gnome. i know that cde wasn't the best invention of desktops but it rarely crashed and it fits far better into the philosophy of xfree86 with their configuration system than gnome. you know the good old way having your settings defined with .xdefaults and all nice default configurations are going into /etc/x11/app-defaults/ and so on. understandable that the good old way may be blocking the future of applications for multiusersystems - but why must it have to be a windows registry like system that replaces future configuration ?

well to come to an end i personally don't like many of this stuff. i can't stand the button reordering, i don't like the gconf system and even more i don't like the commercial outsourcing of gnome and the bad influence that gnome has on other applications. the bad attitude of some gnome developers is another story since we are all different reacting humans. luckily there are people sharing some of my thoughts otherwise i wouldn't be able to proof my text with so many links. even amongst the gnome developers there are silent voices of people that hate many of these decisions and silently use something else. right now if you checkout the gnome cvs repository every day you find out that the whole gnome development seemed to came to an halt. the contributions to their cvs are poor. while projects such as kde are reaching easily 10-20k commits per month - gnome is getting around 1-2k per month on it's best times. it really looks like the situation of gnome is unclear so it would be better to have it not influence so much other programs or at the end we deal with an disaster.

now i hope this text was informative for you. i hope that you start to think about the situation and the global direction. the situation of gnome is unclear, their target is groggy too since i can't belive that the users that they are targeting ever heard of u*nix or linux. they plan to get out of the 0.05% desktop niche but this will for sure not happen if they continue their current direction and their bad ugly

That's a long ways to go... (1)

TopShelf (92521) | more than 10 years ago | (#6498644)

Getting to the single-penny transaction is a major milestone that's still a ways off into the future. I think the more likely model is one of those mentioned in the article, whereby the consumer purchases a set amount that is drawn down over time. The trick is to get that account to cover a wide enough variety of content so that people would be confident of getting value from it. There's no use in having to fund a Go.com account, a NYTimes.com account, and CNN.com account just to do your regular reading...

Re:That's a long ways to go... (1)

aaamr (203460) | more than 10 years ago | (#6498857)

Open Market pioneered a micro-payements system in their ecommerce suite Transact around 1997. Transact was targeted at Commerce Service Providers (CSPs).... the model was essentially that a large company (remember AT&T Securebuy and Time-Warner's Pathfinder?) would run the transaction processing engine for smaller distributed merchants or a large publishing house. The end-user would set up a micro-payments account with the CSP and authorize a set amount from a credit card.

Once the authorization was done, the user could go and purchase items for as little as a penny and have it automatically and transparently deducted from the micropayment account. When they ran out of money, they'd just need to add more funds to the account.

The problem was that the CSP model never took off, Open Market did not remain a viable company focusing on content management instead of their real strength - ecommerce, and the whole thing died out.

Sad when good technology fails to succeed.

Superman III (1, Funny)

pw1972 (686596) | more than 10 years ago | (#6498648)

Yeah, haven't you all seen Superman III. All those 1/10 penny transactions can make you rich like Richard Pryor!

Re:Superman III (4, Funny)

Anonymous Coward | more than 10 years ago | (#6498713)

Just make sure you put the decimal point in the corect place. You don't want to end up in a Federal Pound-Me-In-The-Ass prison.

Ok.. (5, Insightful)

grub (11606) | more than 10 years ago | (#6498651)


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.

Re:Ok.. (1, Insightful)

Anonymous Coward | more than 10 years ago | (#6498866)

And which big companies are pushing micropayments on us? I haven't heard of any. What I have heard is a lot of small, struggling web content providers discussing it, wishing they had it, and arguing about if and how they might be able to do it.

Banner Ad Armageddon (1)

Dan Crash (22904) | more than 10 years ago | (#6498920)

I remember this same sort of thinking when HotWired introduced the first banner ad. And yet, without banner ads, Slashdot probably wouldn't even exist. The question in my mind is: What great sites don't exist now, that could exist by using micropayments?

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 equation is simple -- moneygrub your users too often and they'll flee in droves. Micropayment sellers will learn the lessons of the market, the same as anyone else.

Sounds promising... (2, Insightful)

deman1985 (684265) | more than 10 years ago | (#6498659)

I wonder when individual music artists will be able to take advantage of better systems like these for distributing their music rather than the major record labels-- at least those who really want to make any profit from anything other than their concerts and merchandise...

Re:Sounds promising... (0)

Anonymous Coward | more than 10 years ago | (#6498967)

I suppose, but generally music tracks can draw enough of a price not to need a micropayment system.

Whatever Happened to Micropayments? (4, Funny)

GMontag (42283) | more than 10 years ago | (#6498666)

Whatever Happened to Micropayments?

I believe they fell through the cracks.

Micropayments just became nanopayments... (4, Insightful)

heironymouscoward (683461) | more than 10 years ago | (#6498676)

Whenever you surf to an advertising-sponsored site you are paying.
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... (5, Insightful)

Boss, Pointy Haired (537010) | more than 10 years ago | (#6498679)

The problem with there being competing systems for MicroPayments is that consumers don't want to have multiple accounts (well at least I don't anyway).

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... (1)

Boss, Pointy Haired (537010) | more than 10 years ago | (#6498703)

Further, i'd bet that MasterCard and Visa already have it worked out and have had teams working on the infrastructure for MicroPayments for online transactions for a while.

For some reason they are waiting.

Re:The MicroPayment conundrum... (1)

birder (61402) | more than 10 years ago | (#6498790)

AKIK, Visa/MC charge stores per transaction when people use a creditcard.

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 awfully nice cash from them they don't want to risk losing it in the bubble Internet economy.

Naaah. There's no conundrum. (2, Interesting)

Anonymous Coward | more than 10 years ago | (#6498828)

Once a micropayment company becomes really successful, Paypal will buy them out, and integrate their services with Paypal's. This will make them the de facto standard on the Internet, and the other micropayment companies will die.

Re:The MicroPayment conundrum... (2, Insightful)

obi1one (524241) | more than 10 years ago | (#6498897)

Shouldnt a micropayment system be just like the telephone system? You can have as many companies involved as you want. If they are competing for customers thats awesome, the key is to make micropaying between the different companies seemless, just like calling someone who uses sprint on my at&t phone is no different to me than calling an at&t customer. Unfortunatly it doesnt seem like this will come about without government intervention, and i wont be holding my breath for that.

Nobody cares about micropayments (1)

duffbeer703 (177751) | more than 10 years ago | (#6498681)

Except for the people building the systems.

The costs of processing and verifying tiny transactions make it difficult to process such payments and make a profit.

Re:Nobody cares about micropayments (0)

Anonymous Coward | more than 10 years ago | (#6498726)

You've been hoodwinked by the banks that say ATMs and authorizations actually cost money - why do you think VISA has one of the highest profit margins/earnings ratio of any business in the world. It's banks that take monetary liabilty all VISA does is authorize payments and gives name recognition/psychological assurance.

The real reason micoropayments haven't worked: (4, Funny)

thud2000 (249529) | more than 10 years ago | (#6498682)

The stupid names. "Flooz"? "Beenz"? And I'm not thrilled with "PepperCoin," either.

or, as Homer might say... (0)

Anonymous Coward | more than 10 years ago | (#6498916)

"Flooz? What kind of stupid weiner name is that?!"

Paypal's success was based on $10 free/eBay (4, Interesting)

adzoox (615327) | more than 10 years ago | (#6498686)

It's not that Paypal is/was the only success, it's that they hooked everyone with free money and low fees. Since they had "other" (read as offshore gambling) sources of income and HUGE DeutcheBank investment + very lucky for the moment, stock market returns that allowed them to beat out competition. (eCount, PayMe, and there was another that skips my mind, that I used, that was really really good.)

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 (4, Insightful)

White Shade (57215) | more than 10 years ago | (#6498904)

I think paying anything to recieve an email is an extremely bad idea, at least not without implementing some important features.

You can't forget about the spammers ... eventually they'll have to pay to send their emails which of course will put a major dent into their business, but until there is no way at all that they can send bulk emails, people will not want to have to foot the bill of receiving emails they didn't want anyway.

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 (4, Informative)

JSkills (69686) | more than 10 years ago | (#6498693)

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 ...

Now if only there was a way... (1)

deman1985 (684265) | more than 10 years ago | (#6498696)

to deposit all the spare change that builds up in my car, I'd be making my penny transactions like there's no tomorrow!

Sarcasm? (2, Funny)

Plutor (2994) | more than 10 years ago | (#6498708)

Disaffected youth #1: I still believe that single penny transactions will revolutionize the net.
Disaffected youth #2: Are you being sarcastic, dude?
Disaffected youth #1: [dejectedly] I don't even know anymore.

Micropayment standards are great! (1)

Rogerborg (306625) | more than 10 years ago | (#6498710)

Let's have lots of them!

Re:Micropayment standards are great! (0)

Anonymous Coward | more than 10 years ago | (#6498753)

Ohh, make sure that they're all as anoying to sign up for as PayPal is! Try not to have any way to transfer credit between any of them as well, although if you really must, at least ensure that you charge the user $5 dollars for "administration fees" so they'll not bother!

Micropayments with the iTunes Music Store? (3, Interesting)

Jon Abbott (723) | more than 10 years ago | (#6498716)

I know that somebody always mentions Apple in /. stories nowadays, but does anyone know how they overcame the micropayment issue with their iTunes Music Store? I would think that some lessons could be gleaned from their experience with it.

Mobile Network Operators (1)

spybreak (636509) | more than 10 years ago | (#6498725)

It's the mobile network operators that are going to be the ones to own this market.

The reason? These companies have a massive existing subscriber base in the hundreds of millions. Already the mobile companies in Europe are banding together to create an interoperable payment platform.

One of the major problems that micropayment providers have is acquiring merchants. While sub-dollar transactions sound good from the customers, for some merchants the proposition is not as attractive. This is particularly true for large merchants who are particularly beholden to the banks, card companies and other acquiring institutions.

Apple solved it... (1)

MasonMcD (104041) | more than 10 years ago | (#6498729)

with iTMS, didn't they? Or maybe they just rely on one-click shopping to be the crack that it is, which assures the CC companies the ratio of worthwhile charges will overwhelm any expense incurred with those single 99 cent charges.

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 (1)

L. VeGas (580015) | more than 10 years ago | (#6498733)

This is why I'm founding Micropayment Cooperative (MC). All I need is seed money to get it off the ground. If everyone sends me just $.000025, I should be able to get this up and running within a week.

what is currency? (1)

kbinx (554674) | more than 10 years ago | (#6498735)

When will digital tech be mature enough that people will have the same confidence in it as other mediums i.e. paper. If I'm not mistaken one responsibilty of the US Federal government is the issuance of a common currency. The reason for this I believe is to promote interstate commerce throught the use of one standard. My opinion is that this is actually the Govts responsibility. what do you all think.

Try Xanadu (2, Informative)

Creepy Crawler (680178) | more than 10 years ago | (#6498739)

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.

Ahh, the merits of micropayments (1)

xThinkx (680615) | more than 10 years ago | (#6498742)

Let us not forget that credit cards may be the cause behind SO much unfair cost to the American people, and those of the world for that matter. The interest rates on most credit cards are REDICULOUS, even for those with good credit.

And worse, not only do credit card companies make money off of the consumer, they do so off of the retailer as well. Micropayments may one day create a way to subvert Mr. Visa and Mr. Amex, (whateversupremebeingorlackthereofyoubelievein) bless them. Small businesses would receive HUGE breaks if a working micropayment system could be implemented. I applaud the efforts of all institutions working to further the concept of micropayments.

Think about it, how long are you going to let the already rich credit card companies get richer off of online payments that cost them jack?

Micro-content providers (2, Interesting)

pubjames (468013) | more than 10 years ago | (#6498744)


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 (1)

spybreak (636509) | more than 10 years ago | (#6498775)


Actually, you are not so far off the mark here. Wait 5 years and these kind of things will start to happen.

Re:Micro-content providers (1)

mirko (198274) | more than 10 years ago | (#6498789)

If we are going to have the concept of micro-payments, why can't we have micro-content providers?

What do you mean ?
buying pics (DRM'ed) pixel by (DRM'ed) pixel ?

Re:Micro-content providers (2, Interesting)

tcdk (173945) | more than 10 years ago | (#6498856)

Good idea!

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 only a few cents.

Re:Micro-content providers (1)

radja (58949) | more than 10 years ago | (#6498978)

>nothing says "I like that" as a bit of money, even if it's only a few cents.

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 (1)

adzoox (615327) | more than 10 years ago | (#6498901)

That is very insightful ... where's my mod points?

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 say something interesting I must be selling something interesting ;)

I almost want to pay you for thinking about that!

What about non-virtual 'micropayments' (4, Interesting)

MarcQuadra (129430) | more than 10 years ago | (#6498763)

I've started leaving the spare change when I buy little stuff like coffee, takeout food, and trinkets at small shops. Imagine what would happen to the economy if everybody left their 37 cents after buying coffe? The people working minimum-wage at the coffee shops would be making over $30/hour! I think 'micropayments' in real life (not online) could seriously revolutionize the economy, it would finally give the poorest amongst us the ability to make decent (and tax-free) earnings.

What about non-virtual 'micropayments'/Tax Free? (1)

adzoox (615327) | more than 10 years ago | (#6498803)

When are tip wages tax free?

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 (1)

Mr. McGibby (41471) | more than 10 years ago | (#6498894)

Because rich people don't on average spend as much money relative to their income than poor people do. Give it to the poor and they'll spend it because they have to.

Re:What about non-virtual 'micropayments'/Tax Free (0)

Anonymous Coward | more than 10 years ago | (#6498945)

Say what? You think rich people take their change home and deposit it/count it/horde it?

Response was right was right - how is this tax free? How does this transfer any wealth/help the economy?

Please stop modding the parent - that is the silliest thing I have ever heard!

Also can you stop using social biggotted terms - refer to as "wealthy" not as "rich". I am rich, I am not wealthy. I live a happy life with all that I can ask for and more. I make less than 30K a year!

gnutella + micropayments (1)

smd4985 (203677) | more than 10 years ago | (#6498765)


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).

I've played a bit with Cashets... works ok... (0)

Anonymous Coward | more than 10 years ago | (#6498766)

but they left it out.
http://cashets.com
It had some security issues when I first looked at it (you could change the amount an item cost, including changing it to a negative number thereby syphoning money out of the seller's account and into your own) but at least the latter part is fixed now.

DIY (2, Insightful)

MythMoth (73648) | more than 10 years ago | (#6498771)

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 (2, Insightful)

Dan Crash (22904) | more than 10 years ago | (#6498781)

Most micropayment companies have failed in the past for two reasons:

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.

PayPal can't be trusted (-1, Flamebait)

Anonymous Coward | more than 10 years ago | (#6498786)

It was mentioned that PayPal was a succes. Wel, if you mean they nick your money then it is thue, but for good and secure, trustworthy money transfers they can't be trusted.

They have fun with OPM (Other peoples money)

Greetings.

Looks like flame, but this is not, they realy are a bunch of crooks that steal youre money for some dudious reason...

PayPal can't be trusted/Your posts can't be either (0)

Anonymous Coward | more than 10 years ago | (#6498829)

mod this paranoid ckook down please

Alert! Alert!!! (-1, Flamebait)

Anonymous Coward | more than 10 years ago | (#6498795)

I still believe that single penny transactions will revolutionize the net.

prostoalex is a jew!!!

Quotes to remember... (1)

Dynastar454 (174232) | more than 10 years ago | (#6498799)

No ma, I'm not a loser, I'm just saving my success stories for future generations. Yea, that's it...

Micropayments (1)

MC68040 (462186) | more than 10 years ago | (#6498801)

I belive micropayments is a great idea, I mean, sometimes you actually would want to transact very small amounts of money when buying like... A mp3.

But then you woulden't wanna pay 1 /$ extra just because the transaction company wants to charge you that much no matter what.

No. Micropayments are dead. (3, Insightful)

Anonymous Coward | more than 10 years ago | (#6498819)

I've been saying it for years, and I continue to be right. Micropayments don't solve a customer problem, they solve a provider problem. If you don't solve a customer problem, you don't have a success. Nobody wants to be nickle and dimed to death on the net. It's time to retire this monumentally dumb idea.

The amount of time, effort and money poured down this rathole is really sad.

This has been answered! (4, Informative)

sootman (158191) | more than 10 years ago | (#6498820)

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."

Whatever happened? Two problems (1)

sphealey (2855) | more than 10 years ago | (#6498838)

Two problems with micropayments:

  • Even the non-web-literate realize that using Internet-based micropayments will leave a trail of every transaction they conduct stored on the net, waiting to be vacuumed up by marketers, identity thieves, and Total Information Awareness / CAPS II. Doubleplusungood.
  • 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 bank) there is a very strong incentive not to create a micropayment system that yields $0.001 transaction fees.

sPh

Scott McCloud and Bitpass (1)

chachi5000 (533103) | more than 10 years ago | (#6498841)

Scott McCloud just put up a BitPass only comic at - http://www.scottmccloud.com/comics/trn/intro.html He's been proselytizing about micropayment since his book "Re-Inventing Comics".

Who cares about the tech? (3, Insightful)

dachshund (300733) | more than 10 years ago | (#6498846)

It's great that all of these people are coming out with new Micropayment "technology", but let's face it. The problem has never been the technology, it's simply one of marketing.

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 (3, Insightful)

JonKatzIsAnIdiot (303978) | more than 10 years ago | (#6498848)

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 (2, Interesting)

cperciva (102828) | more than 10 years ago | (#6498852)

The big problem for micropayments is this: Are they automatic?

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.

What if micropayments just worked? (2, Funny)

192939495969798999 (58312) | more than 10 years ago | (#6498858)

I hereby declare the following idea mine: what if you just charged micropayments, and it worked? Suppose that it costs 3 cents to process a 1 cent transaction, but if you're doing 80 billion transactions a month, you don't care because:
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.

Re:What if micropayments just worked? (1)

jimand (517224) | more than 10 years ago | (#6498927)

Is that like the old joke "what we lose on each sale we make up in volume"?

Mobile phones... (1)

MosesJones (55544) | more than 10 years ago | (#6498918)


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.

Micro vs. Mini (0)

Anonymous Coward | more than 10 years ago | (#6498919)

Ahh, finally I happen to peruse Slashdot when a Micropayment story is active. What greatly annoys me is that very few people are asking the most pertinent question: how large should the range of micropayments be?

I do not want to pay 4 cents to read a newspaper article. I'd feel like I was being nickled and dimed to death, and I most certainly do not want to make that damn spending decision 10 times a day. Paying 30 dollars for a game, on the other hand, can be handled by traditional means: credit cards, or for more advanced nations (non-USA), bank transfers.

If the word "micropayment" has come to mean a 1..5 cent payment for a small asset that used to be ad-supported, then shit, no, I do not want to enter that system. But imagine what kind of services could spring up if there was a way to effortlessly and securely pay sums, say, between 1 and 9 dollars! There are loads of intricate Java games and ameteur short videos that I'd be willing to pay a couple of bucks, if nothing else to offset the hosting cost. As it stands, all the data that might fit this Minipayment range are either free, with constant "please donate" and "we are having hosting difficulties" messages, or then they cost something like $20.

The bottom limit needs to be substantial enough to avoid the current micropayment mindset problems and the upper limit low enough to target this system to a new kind of use. The whole thing needs to be initiated by established monetary institutions, ie. banks. (Preferably not credit card companies.)

Paypal is *not* micropayments!!! (2, Interesting)

sootman (158191) | more than 10 years ago | (#6498921)

I know people use paypal for tip jars and stuff, but paypal is *not* micropayments! paypal is a system where anyone can use a credit card to send money to anyone else, with neither side having a merchant account. *that* is the problem paypal solves. paypal does *not* make it easier to pay $.01 or $.03 for a web page. (they are still driven by banks who charge a minimum of $.10 to $30 per transaction, AFAIK.) The reason we will never, ever, ever see true micropayment systems is because the human brain does not want them [openp2p.com]. Here's a bit from that article:
Imagine you are moving and need to buy cardboard boxes. Now you could go and measure the height, width, and depth of every object in your house - every book, every fork, every shoe - and then create 3D models of how these objects could be most densely packed into cardboard boxes, and only then buy the actual boxes. This would allow you to use the minimum number of boxes.


But you don't care about cardboard boxes, you care about moving, so spending time and effort to calculate the exact number of boxes conserves boxes but wastes time. Furthermore, you know that having one box too many is not nearly as bad as having one box too few, so you will be willing to guess how many boxes you will need, and then pad the number.

For low-cost items, in other words, you are willing to overpay for cheap resources, in order to have a system that maximizes other, more important, preferences. Micropayment systems, by contrast, typically treat cheap resources (content, cycles, disk) as precious commodities, while treating the user's time as if were so abundant as to be free.

will micropay for mod points... (1)

QEDog (610238) | more than 10 years ago | (#6498922)

Will MicroPay for modpoints! Then, I will consolidates the numerous micropayments into one bill that will be split between the people who modded me.

Already answered years ago... (4, Insightful)

acroyear (5882) | more than 10 years ago | (#6498968)

Clay Shirky said it best in his article The Case against Micropayments [openp2p.com]:
The Short Answer for Why Micropayments Fail

Users hate them.

The Long Answer for Why Micropayments Fail

Why does it matter that users hate micropayments? Because users are the ones with the money, and micropayments do not take user preferences into account. [...]

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 (3, Insightful)

MyHair (589485) | more than 10 years ago | (#6498975)

Yeah, micropayments sound great to content providers. "Everyone will pay me for only what they use and all of what they use!" But it sounds awful to users.

Let's look at some real-world examples:
  • Take-a-penny trays
  • All-you-can-eat buffets
  • Free refills on non-alcholic drinks everywhere
  • 6 packs, 12 packs, 24 packs (you don't just buy only as many bottles/cans as you want)
  • Unlimited local calls on home phones
  • 600-minute & 1200-minute cell phone plans
Maybe these aren't all completely relevant, but I just don't see paying a little bit for each click being of value to consumers. I see it as being a huge pain in the rear, even if it is all automated and trusted. (cough, Paypal, cough)

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.
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