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To use PayPal - you have to have your money in PayPal, or it will use an underlying credit card. So, it's really just like using a bank account to pay directly.

To use PayPal - you have to have your money in PayPal, or it will use an underlying credit card. So, it's really just like using a bank account to pay directly. Most people don't like having to keep a separate current amount in PayPal to buy stuff. Also - I'm not sure if the merchant fees that PayPal charges are any less, i.e. they didn't take the 'no fees' angle for the merchants. And of course there is the consumer benefit: even if a system only charged 0% to merchants, and not 2-3%, well, consumers don't care. So getting enough consumers to sign up is hard. VISA / AMEX prevent merchants from advertising cheaper prices for use of other cards - so even if a merchant had a 0% processor option, they're not allowed to discount by 2-3% for that card vis-a-vis VISA / AMEX. It's a tightly controlled oligarchy. It's huge, entrenched, it's entire consumer financial system. Going after it would be economic thermonuclear war. A disruptor will have to come from an outside angle - or - be huge and have their own base. So I can see Amazon just 'doing it' themselves, for their own customer base, which equals a critical mass. Or - someone does something 'online' that shakes things up, and that bleeds over into the brick and mortar. A crypto-currency ... I can see doing that in some way.

vortico 9y ago
You can connect PayPal to your bank without a credit or debit card, so yes, they can be out of the equation if the consumer wants to. I don't think PayPal or card fees are significant in this discussion of micropayments. The issue of micropayments is getting people to pay at all, either 0% or 100%. A 3% detail doesn't have a huge effect on why they aren't commonly used.
- jenscow 9y ago
  Yes. The jump from $0 to $0.05 is greater than from $0.05 to $1.
- alexasmyths 9y ago
  "A 3% detail doesn't have a huge effect on why they aren't commonly used." At brick and mortars, where they are operating on 5% margins in many cases, a 3% skim off the top is massive. A 3% arbitrary fee for every electronic payment in north America is really, really quite a huge thing. It's quite massive form of rent extraction, given that there is no real IP, and the actual cost is almost nothing. It's one of the biggest and juiciest forms of obvious oligarchy/monopoly that there is.
  - vortico 9y ago
    Right, totally agree, but this is not the reason that micropayments is not more commonplace. It's equally difficult to get people to log into a payment system to pay $1.40 vs $1.55.
    - alexasmyths 9y ago
      The micropayments are not there because of the minimum charge on VISA transactions of about 25 cents.
      - vortico 9y ago
        I already mentioned two ways around this, which is why your argument is void: Holding small amounts in PayPal (or similar) accounts, and bypassing cards entirely and using bank routing transactions. Both are solved technical problems.

vortico 9y ago

You can connect PayPal to your bank without a credit or debit card, so yes, they can be out of the equation if the consumer wants to. I don't think PayPal or card fees are significant in this discussion of micropayments. The issue of micropayments is getting people to pay at all, either 0% or 100%. A 3% detail doesn't have a huge effect on why they aren't commonly used.

jenscow 9y ago
Yes. The jump from $0 to $0.05 is greater than from $0.05 to $1.
alexasmyths 9y ago
"A 3% detail doesn't have a huge effect on why they aren't commonly used." At brick and mortars, where they are operating on 5% margins in many cases, a 3% skim off the top is massive. A 3% arbitrary fee for every electronic payment in north America is really, really quite a huge thing. It's quite massive form of rent extraction, given that there is no real IP, and the actual cost is almost nothing. It's one of the biggest and juiciest forms of obvious oligarchy/monopoly that there is.
- vortico 9y ago
  Right, totally agree, but this is not the reason that micropayments is not more commonplace. It's equally difficult to get people to log into a payment system to pay $1.40 vs $1.55.
  - alexasmyths 9y ago
    The micropayments are not there because of the minimum charge on VISA transactions of about 25 cents.
    - vortico 9y ago
      I already mentioned two ways around this, which is why your argument is void: Holding small amounts in PayPal (or similar) accounts, and bypassing cards entirely and using bank routing transactions. Both are solved technical problems.