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Tipjoy was working on this idea at one point, but they switched ideas because they couldn't raise enough money to get certified as a money transfer agent. I st

by pg 17y ago

Tipjoy was working on this idea at one point, but they switched ideas because they couldn't raise enough money to get certified as a money transfer agent. I still think it's a great idea. The way to make micropayments work is simply not to insist on them always being collectible, and factor predicted payment rates into your prices.

ivankirigin 17y ago
This is indeed more focused on some of the ideas you liked most. But I think one lesson learned from Tipjoy is that merchant acquisition is the hard part about making a payments system. Increasing conversion rates is nice, lower overhead from micropayments is nice, but does is drive higher revenue? You have to prove that (or something else, like great customer service) to sell to merchants. I also think this focus on pay later doesn't necessarily work for those new to the system (i.e. everyone that matters) who could still be apprehensive and hesitant to commit to a transaction. The use of reputation isn't new. Spare Change had a system of reputation for those who reversed transactions. They let merchants block those with low reputations. A fun anecdote is that they needed to make a reverse-reverse transaction for those that wanted the reputation back. But let me bring it back to merchant acquisition. Amazon and Google are both having a hard time with this too. People don't want to spend development resources on a new payment processor unless they really, really need to. That's why solutions like http://wepay.com http://wepay.com are awesome, because they have a payment product designed for a sizable niche that really could use their services.
patio11 17y ago
When you say "micropayments", were you thinking $5 ~ $10 or $0.05? I see this as being able to provide low-value payments to a clientele that can't normally access them. It fixes the major problem they have: inability to credibly demonstrate willingness and ability to pay within the constraints of an online interaction. Banked people can do this fairly easily: punch in credit card details. (Well, technically, it really fixes the merchant's problem with that user more than the user's problem -- which is one potential stumbling block in user adoption.) This doesn't alleviate the problem with nickel/dime scale micropayments, which is that users hate them with a passion unmatched by a thousand burning suns. That was true back when Clay Shirkey mentioned it in 2000 and is true today. The mental transaction cost makes every single microtransaction a significant barrier to conversion. This is one reason aside from credit card fees why people who do micropayments successfully tend to use a dual currency model where the micropayment currency (bought for cash money) is as easy to spend as the currency which you can earn from ingame actions. (i.e. one-click no auth no confirm purchases, like buying something from the vendor in WoW.)
- BearOfNH 17y ago
  Does one necessarily have to make a purchase prior to payment? Couldn't this concept include a "wallet" as well? Just tell the Qwacker "Bill me $10", take the $10 coupon and $10 cash to the 7/11 and get credited with $10. As an option, possibly for somebody who wants to repair a bad reputation.

by pg 17y ago

ivankirigin 17y ago

This is indeed more focused on some of the ideas you liked most. But I think one lesson learned from Tipjoy is that merchant acquisition is the hard part about making a payments system. Increasing conversion rates is nice, lower overhead from micropayments is nice, but does is drive higher revenue? You have to prove that (or something else, like great customer service) to sell to merchants. I also think this focus on pay later doesn't necessarily work for those new to the system (i.e. everyone that matters) who could still be apprehensive and hesitant to commit to a transaction. The use of reputation isn't new. Spare Change had a system of reputation for those who reversed transactions. They let merchants block those with low reputations. A fun anecdote is that they needed to make a reverse-reverse transaction for those that wanted the reputation back. But let me bring it back to merchant acquisition. Amazon and Google are both having a hard time with this too. People don't want to spend development resources on a new payment processor unless they really, really need to. That's why solutions like http://wepay.com http://wepay.com are awesome, because they have a payment product designed for a sizable niche that really could use their services.

patio11 17y ago

When you say "micropayments", were you thinking $5 ~ $10 or $0.05? I see this as being able to provide low-value payments to a clientele that can't normally access them. It fixes the major problem they have: inability to credibly demonstrate willingness and ability to pay within the constraints of an online interaction. Banked people can do this fairly easily: punch in credit card details. (Well, technically, it really fixes the merchant's problem with that user more than the user's problem -- which is one potential stumbling block in user adoption.) This doesn't alleviate the problem with nickel/dime scale micropayments, which is that users hate them with a passion unmatched by a thousand burning suns. That was true back when Clay Shirkey mentioned it in 2000 and is true today. The mental transaction cost makes every single microtransaction a significant barrier to conversion. This is one reason aside from credit card fees why people who do micropayments successfully tend to use a dual currency model where the micropayment currency (bought for cash money) is as easy to spend as the currency which you can earn from ingame actions. (i.e. one-click no auth no confirm purchases, like buying something from the vendor in WoW.)

BearOfNH 17y ago
Does one necessarily have to make a purchase prior to payment? Couldn't this concept include a "wallet" as well? Just tell the Qwacker "Bill me $10", take the $10 coupon and $10 cash to the 7/11 and get credited with $10. As an option, possibly for somebody who wants to repair a bad reputation.