8 ms·

Micropayment Barriers (1998)

65 points by henning 7y ago

emrehan 7y ago
The footer reads "written 2001-06-30" and The Wayback Machine confirms that the page has not been updated since 2002: https://web.archive.org/web/20020122135113/https://nothings.org/writing/upay.html https://web.archive.org/web/20020122135113/https://nothings.... I find the design of the page quite beautiful.
- deleted 7y ago
  [deleted]
petjuh 7y ago
Seems like most of the internet is ad-supported except stuff like New York Times and Netflix
- jrockway 7y ago
  The New York Times is definitely ad-supported. You can't read the articles unless you pay, but there are still ads after you pay. It is amazing how they can double-dip.
panic 7y ago
Here are fixed links for the comics "(1 and 2)" in the first panel: http://www.scottmccloud.com/1-webcomics/icst/icst-5/icst-5.html http://www.scottmccloud.com/1-webcomics/icst/icst-5/icst-5.h... http://www.scottmccloud.com/1-webcomics/icst/icst-6/icst-6.html http://www.scottmccloud.com/1-webcomics/icst/icst-6/icst-6.h...
tom_mellior 7y ago
At some point cryptocurrencies felt like they could get us most of the way to working micropayments. Unfortunately Bitcoin's huge transaction fees and still unreliable service made that impossible. I still hope this will change at some point, but I can't imagine how a sufficiently dominant cryptocurrency could ever emerge again.
- buboard 7y ago
  Bitcoin is your cash reserve, its like tour bank account and you dont go to the bank every day. There are multiple solutions to the speed issues. The real issue is that crypto is incompatible with any taxation system everywhere
  - tom_mellior 7y ago
    I don't know what you mean by the bank account analogy. I don't go to the bank everyday, but I can interact with my bank account several times per day. I can make free money transfers to any SEPA account, so this is also part of what micropayments should be. It's just tedious, and the money takes two to three days to arrive.
    - stephen_g 7y ago
      Two to three days to arrive? Why? In Australia, our regular banking system lets you register your mobile phone number (or business/company number or email) as a 'PayID' and then that's all the info you need to send somebody an instant payment... Even our older system usually only takes until the next afternoon or morning on a business day (I believe the older inter-bank payments are settled in two batches per business day).
      - tom_mellior 7y ago
        There is certainly no technical reason for the delay, a transfer should just be a transfer of a few bytes of information. I think the usual explanation is that this system gives banks a pool of money that they are always free to invest in the time that it's neither in the original owner's nor the recipient's account.
    - buboard 7y ago
      i mean that bitcoin has de facto become a store of cash rather than cash at hand. It's indeed not like a bank since there are no chargebacks, no insurance nothing. It's different. But there are also multiple solutions to the speed issue, so speed is not really what s holding back widespread adoption. SEPA is bank transfers with delays of entire days - that makes them completely unfit for micropayments.
wiradikusuma 7y ago
In my opinion, micropayment is more or less a solved problem these days, at least on mobile. I'm an old fart, I never understand why free games can make a lot of money from selling "powerups" and even vanity stuff like "skins", but as we all know, it's big money. I even don't understand people buying scratch cards/vouchers from convenience stores with marked-up price. TL;DR: Lots of free apps/games, yet people pay, sometimes at premium/need to literally walk to a shop. And, not only Google Play or Apple AppStore, WeChat and other super-apps are also enabling micro payments. Some issues are still valid though, such as monopoly by the middlemen.
- grawprog 7y ago
  >I'm an old fart, I never understand why free games can make a lot of money from selling "powerups" and even vanity stuff like "skins", but as we all know, it's big money. I was like yourself with this belief until i tried out mobile legends at a friend's request. I'd always read how bad those games were for that but I didn't really get why until I seen it myself. The game is so full of dark patterns and Skinner boxes to get you spending I don't even know where to begin. It's my first f2p game with things like that, it boggles my mind how much crap is being constantly thrown at me to get me to spend money on random skins, powerups, and heroes. Even when you're not playing, the game entices you to log in to give you a free chest every few hours with a push notification. It reminds me of the way a drug dealer gets customers hooked. They give you little bits of free shit when you first start then cut you off hard after a week.
- TACIXAT 7y ago
  Those aren't really micro though. You can't spend a cent digitally, much less a fraction of a cent. The fee structure doesn't allow for it.
  - coldtea 7y ago
    The latter (only up to cent level) shouldn't really matter. Are people that cheap that their problem is they have to give "at least a cent"? Sub-cent might matter for third world countries wanting to micropay for a western content creator, but it's more than good enough for the 4+ billion of people in developed economies. And I'd say, relative cost-of-living considered, even someone making $100 dollars month could afford a cent payment, like a person making $3000/month can afford a $5 latte. But I don't think many $100/month populations have "how do I support a western content creator already living 20x as luxuriously as me" as their concern... So if that was the issue, we could already solve it with cent-granularity payments....
DennisP 7y ago
I used to kinda believe in the argument that it's too much trouble for users, but now a single-click micropayment seems way easier than all the crap I do to bypass soft paywalls. (I'm not averse to paying and have a digital subscription to one national newspaper, but paying for thirty newspapers just so I can click on reddit links without hassle seems unreasonable.)
- hakfoo 7y ago
  I think the problem is still that it's friction. I may have a hundred million pageview credits, but it's still a gnawing "This will cost me one." It's still going to end with "we're outside the big network and want a seperate fee." The simplest answer is to pull the consumer from the purchasing loop. Create a state endowment to pay artists and journalists a living wage, public-domain all the things, and then we can browse in peace, knowing our taxes paid for it.
  - tom_mellior 7y ago
    I think a variant of the street performer protocol (later reinvented as "crowdfunding", minus the idea that once something is funded, it should be available to everyone) is the way to go. A newspaper could put up a widget saying "these are our monthly expenses, and here is how much in tips we have collected so far this month". People interested in keeping the paper going would tip. Or, well, maybe not, tragedy of the commons and everything. The important difference to "pay per view" being that you have less of the "this is going to cost me one" problem. You can see what the paper offers and then pay what you think is appropriate. It does seem to work for Wikipedia.
  - DennisP 7y ago
    I'd be ok with that if it's not unaccountable bureaucrats deciding which artists and journalists get paid. Some variant of "liberal radicalism" might work out well: https://marginalrevolution.com/marginalrevolution/2018/09/liberal-radicalism-mechanism-producing-public-goods.html https://marginalrevolution.com/marginalrevolution/2018/09/li...
slowenough 7y ago
What's the barrier to using Stripe to top-up credit (say USD 20 buys 1 million virtual credits) then spending those on the web buying tiny things for tiny amounts? In a sense, WeChat Pay etc in China have already "overcome barriers" to micropayments, even tho the amounts do not need to be micro.
- jiofih 7y ago
  That means the company holding that credit becomes subject to financial regulation, which is complex and expensive. Plus merchants now have to integrate with yet another middleman. The simpler solution is: no fees for small debit transactions, once the baking system is modernized the cost of a transaction is in fact close to zero. This is already the case in Western Europe.
  - buboard 7y ago
    No fees doesn’t solve the onerous accounting issues. This needs some kind of mechanism and legislation that allows accounting of a small amount of money without disclosing the transacted parties
  - slowenough 7y ago
    Interesting. I didn't know the blocker was financial regulation. Thanks for letting me know!
- TACIXAT 7y ago
  The term to look up is money service business. It wouldn't be so bad except there are federal regulations as well as state regulations. For an internet enabled system, that means registering in 50 states. An estimate I saw put getting licenses for all states in the 200k range. This difficulty compounds because banks went through a big derisking and are more or less allergic to MSBs. It seems a little anti competitive to have the banks deny you access to payment processing. The alternative is they will charge very high account maintenance fees (10k per month has been quoted to me). I really want to build something like this but it will be a legal nightmare. No wonder people are looking to cryptocurrencies to solve these issues. I'm actually a little excited about libra since they will have the resources to overcome these hurdles.
chabes 7y ago
Multiple responses here claiming that “micropayments are solved” Yeah, maybe for folks in Silicon Valley who have bank accounts. What about the other few billion people?
- buboard 7y ago
  I think micropayments means cash, anonymous . No, my card issuer has no right to know that i spent my hard earned cash on porn
big_chungus 7y ago
Can someone explain why micro-payments are good? I get a potential benefit to companies (it typically also means easier payments), but I don't see the benefit to consumers. My perception has been that there is a push towards smaller payments at a higher frequency, such that consumers pay more over all but don't notice it; a sort of financial "death by a thousand cuts". Is there any actual consumer benefit to these? I can think of no personal case where I even _want_ to make small payments.
- TACIXAT 7y ago
  They could replace ads. I would personal prefer to pay the tenth of a cent my ad view generated than have to see an ad.

65 points by henning 7y ago

The footer reads "written 2001-06-30" and The Wayback Machine confirms that the page has not been updated since 2002: https://web.archive.org/web/20020122135113/https://nothings.org/writing/upay.html https://web.archive.org/web/20020122135113/https://nothings.... I find the design of the page quite beautiful.

deleted 7y ago
[deleted]

petjuh 7y ago

Seems like most of the internet is ad-supported except stuff like New York Times and Netflix

jrockway 7y ago
The New York Times is definitely ad-supported. You can't read the articles unless you pay, but there are still ads after you pay. It is amazing how they can double-dip.

panic 7y ago

Here are fixed links for the comics "(1 and 2)" in the first panel: http://www.scottmccloud.com/1-webcomics/icst/icst-5/icst-5.html http://www.scottmccloud.com/1-webcomics/icst/icst-5/icst-5.h... http://www.scottmccloud.com/1-webcomics/icst/icst-6/icst-6.html http://www.scottmccloud.com/1-webcomics/icst/icst-6/icst-6.h...

tom_mellior 7y ago

At some point cryptocurrencies felt like they could get us most of the way to working micropayments. Unfortunately Bitcoin's huge transaction fees and still unreliable service made that impossible. I still hope this will change at some point, but I can't imagine how a sufficiently dominant cryptocurrency could ever emerge again.

buboard 7y ago
Bitcoin is your cash reserve, its like tour bank account and you dont go to the bank every day. There are multiple solutions to the speed issues. The real issue is that crypto is incompatible with any taxation system everywhere
- tom_mellior 7y ago
  I don't know what you mean by the bank account analogy. I don't go to the bank everyday, but I can interact with my bank account several times per day. I can make free money transfers to any SEPA account, so this is also part of what micropayments should be. It's just tedious, and the money takes two to three days to arrive.
  - stephen_g 7y ago
    Two to three days to arrive? Why? In Australia, our regular banking system lets you register your mobile phone number (or business/company number or email) as a 'PayID' and then that's all the info you need to send somebody an instant payment... Even our older system usually only takes until the next afternoon or morning on a business day (I believe the older inter-bank payments are settled in two batches per business day).
    - tom_mellior 7y ago
      There is certainly no technical reason for the delay, a transfer should just be a transfer of a few bytes of information. I think the usual explanation is that this system gives banks a pool of money that they are always free to invest in the time that it's neither in the original owner's nor the recipient's account.
  - buboard 7y ago
    i mean that bitcoin has de facto become a store of cash rather than cash at hand. It's indeed not like a bank since there are no chargebacks, no insurance nothing. It's different. But there are also multiple solutions to the speed issue, so speed is not really what s holding back widespread adoption. SEPA is bank transfers with delays of entire days - that makes them completely unfit for micropayments.

wiradikusuma 7y ago

In my opinion, micropayment is more or less a solved problem these days, at least on mobile. I'm an old fart, I never understand why free games can make a lot of money from selling "powerups" and even vanity stuff like "skins", but as we all know, it's big money. I even don't understand people buying scratch cards/vouchers from convenience stores with marked-up price. TL;DR: Lots of free apps/games, yet people pay, sometimes at premium/need to literally walk to a shop. And, not only Google Play or Apple AppStore, WeChat and other super-apps are also enabling micro payments. Some issues are still valid though, such as monopoly by the middlemen.

grawprog 7y ago
>I'm an old fart, I never understand why free games can make a lot of money from selling "powerups" and even vanity stuff like "skins", but as we all know, it's big money. I was like yourself with this belief until i tried out mobile legends at a friend's request. I'd always read how bad those games were for that but I didn't really get why until I seen it myself. The game is so full of dark patterns and Skinner boxes to get you spending I don't even know where to begin. It's my first f2p game with things like that, it boggles my mind how much crap is being constantly thrown at me to get me to spend money on random skins, powerups, and heroes. Even when you're not playing, the game entices you to log in to give you a free chest every few hours with a push notification. It reminds me of the way a drug dealer gets customers hooked. They give you little bits of free shit when you first start then cut you off hard after a week.
TACIXAT 7y ago
Those aren't really micro though. You can't spend a cent digitally, much less a fraction of a cent. The fee structure doesn't allow for it.
- coldtea 7y ago
  The latter (only up to cent level) shouldn't really matter. Are people that cheap that their problem is they have to give "at least a cent"? Sub-cent might matter for third world countries wanting to micropay for a western content creator, but it's more than good enough for the 4+ billion of people in developed economies. And I'd say, relative cost-of-living considered, even someone making $100 dollars month could afford a cent payment, like a person making $3000/month can afford a $5 latte. But I don't think many $100/month populations have "how do I support a western content creator already living 20x as luxuriously as me" as their concern... So if that was the issue, we could already solve it with cent-granularity payments....

DennisP 7y ago

I used to kinda believe in the argument that it's too much trouble for users, but now a single-click micropayment seems way easier than all the crap I do to bypass soft paywalls. (I'm not averse to paying and have a digital subscription to one national newspaper, but paying for thirty newspapers just so I can click on reddit links without hassle seems unreasonable.)

hakfoo 7y ago
I think the problem is still that it's friction. I may have a hundred million pageview credits, but it's still a gnawing "This will cost me one." It's still going to end with "we're outside the big network and want a seperate fee." The simplest answer is to pull the consumer from the purchasing loop. Create a state endowment to pay artists and journalists a living wage, public-domain all the things, and then we can browse in peace, knowing our taxes paid for it.
- tom_mellior 7y ago
  I think a variant of the street performer protocol (later reinvented as "crowdfunding", minus the idea that once something is funded, it should be available to everyone) is the way to go. A newspaper could put up a widget saying "these are our monthly expenses, and here is how much in tips we have collected so far this month". People interested in keeping the paper going would tip. Or, well, maybe not, tragedy of the commons and everything. The important difference to "pay per view" being that you have less of the "this is going to cost me one" problem. You can see what the paper offers and then pay what you think is appropriate. It does seem to work for Wikipedia.
- DennisP 7y ago
  I'd be ok with that if it's not unaccountable bureaucrats deciding which artists and journalists get paid. Some variant of "liberal radicalism" might work out well: https://marginalrevolution.com/marginalrevolution/2018/09/liberal-radicalism-mechanism-producing-public-goods.html https://marginalrevolution.com/marginalrevolution/2018/09/li...

slowenough 7y ago

What's the barrier to using Stripe to top-up credit (say USD 20 buys 1 million virtual credits) then spending those on the web buying tiny things for tiny amounts? In a sense, WeChat Pay etc in China have already "overcome barriers" to micropayments, even tho the amounts do not need to be micro.

jiofih 7y ago
That means the company holding that credit becomes subject to financial regulation, which is complex and expensive. Plus merchants now have to integrate with yet another middleman. The simpler solution is: no fees for small debit transactions, once the baking system is modernized the cost of a transaction is in fact close to zero. This is already the case in Western Europe.
- buboard 7y ago
  No fees doesn’t solve the onerous accounting issues. This needs some kind of mechanism and legislation that allows accounting of a small amount of money without disclosing the transacted parties
- slowenough 7y ago
  Interesting. I didn't know the blocker was financial regulation. Thanks for letting me know!
TACIXAT 7y ago
The term to look up is money service business. It wouldn't be so bad except there are federal regulations as well as state regulations. For an internet enabled system, that means registering in 50 states. An estimate I saw put getting licenses for all states in the 200k range. This difficulty compounds because banks went through a big derisking and are more or less allergic to MSBs. It seems a little anti competitive to have the banks deny you access to payment processing. The alternative is they will charge very high account maintenance fees (10k per month has been quoted to me). I really want to build something like this but it will be a legal nightmare. No wonder people are looking to cryptocurrencies to solve these issues. I'm actually a little excited about libra since they will have the resources to overcome these hurdles.

chabes 7y ago

Multiple responses here claiming that “micropayments are solved” Yeah, maybe for folks in Silicon Valley who have bank accounts. What about the other few billion people?

buboard 7y ago
I think micropayments means cash, anonymous . No, my card issuer has no right to know that i spent my hard earned cash on porn

big_chungus 7y ago

Can someone explain why micro-payments are good? I get a potential benefit to companies (it typically also means easier payments), but I don't see the benefit to consumers. My perception has been that there is a push towards smaller payments at a higher frequency, such that consumers pay more over all but don't notice it; a sort of financial "death by a thousand cuts". Is there any actual consumer benefit to these? I can think of no personal case where I even _want_ to make small payments.

TACIXAT 7y ago
They could replace ads. I would personal prefer to pay the tenth of a cent my ad view generated than have to see an ad.