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Ask HN: Is there hope for micropayments?

• charcircuit 4y ago
  It exists in games with their own currencies. In the cryptocurrency space. Online advertising sends micropayments to publishers. Spotify sends micropayments to artists. Cloud computing uses it too.
  • meheleventyone 4y ago
    The interesting phenomenon in games is that "micro-transactions" aren't normally very small at all even though they are denominated in their own currency. Very much miles away from the fractions of a cent that people are talking about here. Spotify and paying cloud companies are micropayments in the same way metered water and electricity are. In that they aren't. Both bill/pay out on either a regular schedule or a threshold.
• debdut 4y ago
  I love the idea but never saw a good implementation other than monthly billing or prepaid credits
• blep_ 4y ago
  Personally, I'd prefer to just pay tiny constant monthly fees for things, than to have the mental overhead of knowing there is a nonzero cost for every search I do. I am prone to microoptimizing things, and I would absolutely spend an objectively excessive amount of time and mental energy trying to avoid doing another search to save three cents.
  • Raed667 4y ago
    I have the same issue. If I'm paying 0.005$ for every search, I would stop searching because of the mental effort to optimize everything. One alternative that could work, is to make a subscription service, and then reimburse the unused amount. Like make people pay 20$/month, then do your micropayment system in the background, by the end of the month, refund them to difference if they didn't exceed that monthly value. It creates a positive feeling instead of a constant background stress with every interaction.
    • nathanganser 4y ago
      Interesting to hear about how micro-payments would make you two feel. This is indeed the theoretical expectation I had regarding micro-payments, but I was positively surprised to find out that I didn't care at all and in the end, I'm always positively surprised by the GPT-3 bill (I got much more value out of it than they charged me).
      • blep_ 4y ago
        This does seem very likely to vary by person. I'm very much saying this from the perspective of "for my own sake, I hope this doesn't become the standard", rather than "this will never happen because everyone's brain is like my brain". I've made my share of blatantly wrong predictions based on the latter :)
      • krageon 4y ago
        If the level of a bill surprises you, you are financially irresponsible. That just doesn't gel with an adult beyond a certain age (barring some outliers), which is probably what you are seeing above.
        • cto_of_antifa 4y ago
    • aaaaaaaaata 4y ago
      This is Proof of Stake.
• jasode 4y ago
  >, I've found myself paying for OpenAI's GPT-3 playground app in micropayments format. Unless I'm misunderstanding OpenAI's pricing format for "bulk tokens" [1] prepaid for by credit-cards, this isn't web micropayments in the way many others think of that term. Likewise, buying audiobooks via Audible Credits by prepaying $229.50 to get 24 credits isn't really micropayments. Some were hoping for internet micropayments at the granularity of transactions rather than pre-paying a large upfront amount to be parceled out in smaller amounts later. What prevents micropayments at the fine granularity is the high VISA/Mastercard credit-card transaction fees. E.g. many want to micropay 2 cents for a news article without prepaying $10/month or $120/year to a "media aggregator" taking a percentage cut of that. [1] https://openai.com/api/pricing/ https://openai.com/api/pricing/
  • nathanganser 4y ago
    Just regarding OpenAI's pricing, the usage is paid for at the end of the month (Stripe's pricing would indeed make it unfeasible to charge for each cent individually, hence they bulk-charge at the end of the month). I could imagine The Economist charging me at the end of the month for the 20 articles * 10 cent I consumed.
    • yunohn 4y ago
      Sure, but that’s just a credit billing system then. Still not micro transactions.
  • tzs 4y ago
    Another thing that puts a damper on them is taxes. Let's say my site lets people purchase news articles for 1 cent. I get 4 readers in Chicago who each purchase 1 article per week. That's 208 transactions for a total of $2.08. That's over the threshold in Chicago's state, Illinois, for creating an "economic nexus". Their threshold is $100k sales per year or 200 transactions per year. So now I've got to register with Illinois and do regular tax filing. I may also have to collect more data than I want on my readers there, such as address information, to figure out the right rate (rates vary by location within most states). 23 other states also have that annoying "or 200 transactions" condition on their economic nexus laws. Compare this to if I instead only offer my news articles through an aggregator. Now when those 4 readers in Chicago buy my articles they are doing business with the aggregator. I don't have to deal with any Illinois taxes. Or any of those other 23 states' taxes. That's the aggregator's problem. That's fine because the aggregator presumably has not just my 4 readers in Illinois but also plenty of readers of the other content they aggregate, making their business in the state large enough that the costs of dealing with taxes are comparatively small.
• viraptor 4y ago
  We kind of do have it, but hidden behind prepays/pooled payments. Nobody wants to deal with people actually paying $1.5 for something. Just processing that from a card is not worth it unless you're a massive company. (AWS does charge me $0.46 for S3 on some account) But my Nebula subscription is effectively a few micropayments in a trench coat. Same for Vultr. The only time I'm touching actual micropayments is when someone sends me $0.50 through Brave.
  • rocqua 4y ago
    Why is 'after the fact' aggregation not something that took off.
    • mschuster91 4y ago
      Because you need to have an (enormous) upfront amount of cash to cover payments to the vendors and then have to deal with fraudsters using your service to test out if stolen cards are actually still good.
• giantg2 4y ago
  I confused the headline with micro deposits, like the 10 cents that gets deposited and withdrawn to link a bank account. I wouldn't pay for my searches. I don't think I would pay for maps either. Plenty of alternatives.
  • politician 4y ago
    You used to pay for maps. On a long car trip, we would stop at a gas station in a new state and pick up a laminated foldable map of the local region for a few bucks. Of course, we don’t do that anymore. Is Rand McNally still around?
    • giantg2 4y ago
      Many states had free maps at their rest areas. I think Rand McNally is still around. I think I bought a topo map they made just a few years ago. In the online map world, there are free alternatives if any one of them started charging.
• mavili 4y ago
  In Europe and the UK there is now the Open Banking standard [1] that should technically make it a lot more feasible to do micro payments because it allows account-to-account transactions, therefore not needing to go through Visa/Mastercard processes and fees. [1] https://standards.openbanking.org.uk/ https://standards.openbanking.org.uk/
  • tomatocracy 4y ago
    Maybe. One potential problem is that the banks aren't likely going to want to spend time dealing with verifying security and onboarding for smaller operators who want to use the APIs directly for this, which will mean aggregators have to get involved (who in turn will need to take a cut to cover costs and make a reasonable profit).
    • mavili 4y ago
      Yeah there will be that but if I'm not mistaken it isn't the banks who need to authorise individual API providers. There is a directory of allowed services that get whitelisted by the Open Banking "consortium" - I don't think a bank can then deny any requests coming from that list. However, you're still correct because to get whitelisted by Open Banking is in itself a long process and has requirements that makes it unfeasible for many small service providers.
  • Terry_Roll 4y ago
    The cost of going through a payment processor for micropayments has always been more than the micropayment because the "security checks" over and above using TLS security on a website starts pushing the costs up _if_ done properly. Saying that those costs should be coming down today compared to a decade or two ago because there is also much better surveillance, more bugs and backdoors/zero days have been found and with the global inflation stalking the planet, ironically it could be the inflation that helps make micro payments become more popular. This is why advertising fees pay for search engine results and its an excuse to intelligence grab from businesses through their advertising criteria so its not just human end users who get surveilled.
  • 4y ago
• ibz 4y ago
  The whole Podcasting 2.0 / "value 4 value" movement is built on top of Lightning Network micropayments. It works. People use it. When you listen to a podcast that has the v4v tags in the feed using a compatible app you are given the option to send contribution based on how much you have listened. Also, you can send "boosts" which include a message that the podcaster could, for example, read out live. I think the next step would be something similar but for blogging / text content. PS: I myself wrote a RSS reader & podcast client that I released on the Umbrel app store. As you listen to podcasts, you can stream donations straight from the app running on your Umbrel node using funds you have complete custody of. It is pretty amazing. PPS: In the Lightning world, micropayments can be as low as a millisat, which is 1/1000 of a satoshi. Routing fees are also very low and transactions are instantly confirmed.
  • Quindecillion 4y ago
    There's also a lot of work happening in the gaming space for economies and rewards in virtual worlds. Zebedee is one, but there are others. Bitcoin with Lightning finally makes micro/nano-payments practical and it's going to flip the Internet economy on its head.
    • siwatanejo 4y ago
      Mod parent up! I don't understand why these comments are being flagged. Too much white-knights in HN in opposition to open innovation.
      • ibz 4y ago
        I sometimes also wonder why are HNers so anti-Bitcoin, which - politics aside - is one of the major innovations built on top of the Internet.
        • ghostpepper 4y ago
          I think it's because the tech has been adopted as the disguise-du-jour of scammers and charlatans. Once the public understands better and the hype goes away then maybe we will actually be able to have some applications built that utilize the actual advantages of blockchain without dealing with the mental overhead of worrying that it's more than likely a scam.
• sshine 4y ago
  DigitalOcean droplets: $0.007/hour. Most of my servers run for a long period of time, but sometimes I do experiment with running a certain setup that I kill after a few hours or days. Knowing that I only pay per hour at the same low cost allows me to experiment more. Those are not cryptocurrency micropayments, and the actual transfer aggregates to one accumulated, monthly payment.
  • wiredfool 4y ago
    Right, that's a microcost, not a micropayment. Similarly Amazon charges by the byte of storage on S3, but bills monthly.
• jzellis 4y ago
  Back in the dark ages, I was an early employee of Bitpass, a micropayments startup, and for Bitpass I co-founded what may have been the first completely indie online music store, Mperia (in the sense that artists could simply upload and sell their work directly, with no contracts or middlemen). It used Bitpass micropayments for record sales. (We may have also been the first online music store to have Creative Commons licensing built in, as our launch coincided with CC's. I'll never forget at their launch party, when the nice, awkward teenage kid I thought was just some attendee's son got up and was introduced as one of CC's developers, Aaron Swartz.) The thing that killed the momentum then is the same thing that still kills it - card transaction fees. Bitpass got around this by allowing you to buy Bitpass credits for like $3, which you could spend anywhere. It worked great for music, and Mperia was originally seen as a good gateway (and, frankly, loss leader) for getting people to adopt our system. Alas, it never took off, and Bitpass's brilliant CEO and founder got sidelined by investors in favor of some ronin CEO from the ad world who bogged it down in awkward partnership deal negotiations until the money ran out. I'm still convinced, all these years later, that if they'd focused on the indie media angle, it could have taken off. (I also wish that this band who played their first gigs ever at my coffeeshop open mic in Vegas called The Killers had put their record up pre-record label deal, as I asked them to. I think Brandon was down but their shitty manager told them not to, and later they sued him for being shady af, which I did warn them about.)
  • jzellis 4y ago
    This, by the way, was my first big burnout moment. You put your life into your startup and you truly believe this might make the world a better place, and then a bunch of MBA fucknuts come in and ruin it and you're left with useless stock options and a broken heart. Now I just want to get paid. Never trust the suits, kids. Never trust their bullshit. And never give your heart to the business. It'll get broken every time.
    • fullstackchris 4y ago
      Unless you're the owner of it. Then its okay ;) (But even then still never trust the suits)
• ramshanker 4y ago
  Meanwhile in India, offline micro payment has become more convenient than Cash. Look for UPI. Unified Payment Interface. I regularly make payment of INR 10 ( USD 0.13) for a cup of Tea at a roadside stall.
  • anonymousDan 4y ago
    Can you say a bit more about how it works? Who runs the infrastructure to support it? Is it some kind of collaboration between the local banks?
    • deleted 4y ago
      [deleted]
• jitendrac 4y ago
  Transferring the $1 vs $1000 digitally, have no technical difference and hence the commission based payment cut is something that I have a hard time to accept. Btw I am from India. Earlier,every time I see people swipe the cards in the retail stores, I felt sorry for the shopkeepers as they had to bear the 1.5%-2% as transaction charges of the total amount paid. It all changed after the launch of UPI payment system, now I can just pay 5-10 INR(7 cents to 13 cents) to a shopkeeper without feeling the guilt of payment charges. It has been more than two years when I used my last VISA card payment transaction for any retail shopping. I think other countries should also develop such not-for-profit payment network system that can be used to pay efficiently digitally without making any side the victim.
  • SwiftyBug 4y ago
    Brazil's Pix[1] completely transformed the way we deal with payments day-to-day. It's available 24/7, free of fees and has really good UX. Many small merchants are giving up on credit card and accepting only Pix. And the Central Bank of Brazil keeps pushing Pix's capabilities forward. Last year they launched two features that can be translated something like Pix Withdrawals and Pix Change (Pix Saque and Pix Troco in Portugues). The two features work similarly. Essentially they turn every commercial site into an ATM. You make a Pix to, say, a supermarket and get that money in cash. Or, in the case of Pix Change, you'd pay in Pix more than the total value of the purchase and receive the change in cash. Pix is not even 2 years old and it's already changed the way people deal with money. It's incredibly reliable and astonishingly fast. Who would say that the biggest Brazilian fintech revolution of all times would come from the Central Bank? [1]: https://en.wikipedia.org/wiki/Pix_(electronic_payment_system https://en.wikipedia.org/wiki/Pix_(electronic_payment_system...
    • hobo_mark 4y ago
      Also, Marc Rubinstein covered Pix in his newsletter some time ago https://www.netinterest.co/p/paying-faster-99d https://www.netinterest.co/p/paying-faster-99d.
    • plutaniano 4y ago
      I'm a brazilian living in Brazil and I can't overstate how much of a game changer Pix is. The Brazilian Central Bank did an outstanding job. Instant transactions, zero fees, available to anyone with a bank account.
• g5095 4y ago
  Dogecoin is being used for micropayments and the tipping economy everyday, with fees that are well under 1c.
  • g5095 4y ago
    • cowtools 4y ago
      Those aren't facts. The reason the fees are low is simply because traffic is low. It has nothing to do with the design of dogecoin.
  • wink 4y ago
    "There are dozens of us. Dozens!" I think the people aren't saying you're wrong because it's untrue, but that's like a niche of a niche.
  • rglullis 4y ago
    Have you asked yourself what would happen with the fees if more people started making payments using Doge?
• philihp 4y ago
  AWS
• kdragon 4y ago
  The future of micropayments will be the Lightning network. It's still under heavy development, but people use it to stream instant sub-cent payments all the time. Check out stacker.news as a live example.
• sam345 4y ago
  At least in the US as long as every transaction is a taxable event what's the point.
  • choxi 4y ago
    But as long as it’s a percentage it shouldn’t matter if it’s a micro or macro transaction Edit: my mistake was assuming any taxes are simple, see here for example: https://news.ycombinator.com/item?id=31389210 https://news.ycombinator.com/item?id=31389210
• ArtWomb 4y ago
  I think the idea was coalesced in Jaron Lanier's Ten Arguments for Deleting Your Social Media Accounts Right Now: if there are no micropayments, there's no middle class. If there's no middle class, we're essentially doomed. So it feels logical that there has to be a marketplace for "ideas" and "thoughts", not just services. Creating a kind of global network of independent researchers as in E. M. Forster's The Machine Stops (1909): https://en.wikisource.org/wiki/The_Machine_Stops https://en.wikisource.org/wiki/The_Machine_Stops
• deleted 4y ago
  [deleted]
• iandanforth 4y ago
  Many of the limitations are around the values for payment processor minimums. With rapid inflation it will be a race to see if those values change first or the values of what we consider 'micro' today exceed their minimums making 'small-but-not-micro' payments easy because they are just normal payments in the eyes of payment processor policies.
• amelius 4y ago
  Perhaps they will work, as in-app payments, inside Apple's walled garden.
• LocalPCGuy 4y ago
  While it isn't micro-payments as many think about them, we did run this experiment with cell phones. First it was SMS messages, commonly used to cost $0.10 per message. Still the case for a small group of people, and some may seek out pay as you go plans to optimize their bill, but for most, they prefer to just pay a little more monthly it seems and not worry about being billed for each one. (I know it's not a perfect correlation, but it is probably the largest scale study of pay as you go vs. other options that we have.) I've been waiting (both with anticipation and dread) for a day when micro-payments are ubiquitous, as I think it's the only way to compete with the subscription and ad business models. I just don't know if people will really accept it given previous examples of it have played out. But I still hope someone gets it right, and I can pay 5c to read a newspaper article without needing to subscribe, and things like that.
  • drieddust 4y ago
    India have this very well figured out with its Universal Payment Inferface (UPI)[1]. Payment of any amount small or big is possible online as well as offline. I use the same interface to transfer 100k+ to my trading account and also to buy vegetables from a roadside vendor for few rupees. This is an open system so lots of competition and zero lock-in is possible. It's su successful that world's 40% digital transaction are hapenning in India. [1] https://en.m.wikipedia.org/wiki/Unified_Payments_Interface https://en.m.wikipedia.org/wiki/Unified_Payments_Interface
• DocTomoe 4y ago
  The problem with micropayments is nontrivial. In order to make micropayments work, you need to 1. have some sort of personal money-holding folder (it's so hard to avoid the word 'wallet' here), that you can easily fill (e.g. via your credit card). This moneyholder needs to be sufficiently safe for use, and should be password-protected. Ideally, it's a function or tightly integrated with your browser. 2. The website itself needs a moneyholder, though this could conceivably be implemented with limited functionality. 3. An easy to implement way to have small transactions from your moneyholder to the moneyholder of a website. To avoid creating issues around money laundering, the maximal height or a daily limit for transaction to one destination could be considered. 4. A legal way to retrieve funds from that moneyholder. That's the easy part. Now consider the following: 1. The system should be useable regardless of the participants countries of origin, even in countries that have a cash culture and little implementation of credit cards... 2. ... but must adhere to international and national legislation (looking at you, Russian/Iranian/Cuban sanction regime) 3. A certain level of anonymity is advisable. The newsman at the newsstand has no idea what my name or address is when I buy a newspaper, and neither should the micropayment merchant. 4. Transactions need to be failsafe and fast. I don't want to first click through four layers of login screens and read an email before I get to reading the article I was about to buy. 5. Somehow, whoever manages this system needs to make enough money to support infrastructure and engineers, plus a profit. (The most easy way would be to demand a 5% processing fee for sending money into the moneyholder... I can see that approach failing for psychological reasons, though ("I put 20 dollars in there, why is my balance only 19$?") All current net payment schemes fail in one of these fields. Paypal is comparatively fast and ubiquitous, but fleeces people with their fees. Cryptocurrencies are often slow - and processing fees are no joke, not to being with the volatility issues. I think GNU Taler [1] is interesting, but that by necessity would become a regional solution linked to local banks at best. [1] https://taler.net/en/index.html https://taler.net/en/index.html
  • cowtools 4y ago
    Cryptocurrencies are not nessarily more volatile, but they are certainly slower. I don't think you need to make the same tradeoffs because less decentralization is needed for micropayments. I think GNU Taler is a good solution but it is competing against a monopolistic surveilance network that the banks profit from. I don't think the world/country can depend on a single company like PayPal. Once you get vendor lock-in, they will hike up the fees. GNU Taler would implement the same interface/API across different banks/vendors/wallets, so the individual switching cost (of going to another bank, for example) is low.
• AndrewStephens 4y ago
  Mircopayments (in the form of "Read this article without a subscription for 2 cents - click here") are one of those ideas that everyone claims they want but don't. The only way consumers can use micropayments is to set up a subscription via a credit card (or similar). Either with the vendor themselves or via a thirdparty. They don't want to do that. Publishers don't want to deal with the hassle of accepting 100000 small transactions, some percentage requires them to add sales tax, some percentage will fail, and a non-zero percentage will be reversed. In the face of these problems, getting a check every month for advertises seems like a much better bet. The closest thing to micropayments for content makers is something like Patreon, where consumers pay a small amount up-front for access to future content. But even here, a small amount is usually a few dollars rather than cents.
  • imtringued 4y ago
    It sounds like the only way you could possibly implement this is by having ad networks sell ad blocking. However, there are too many ad networks for this to be viable.
    • AndrewStephens 4y ago
      "That's a real nice clean browser window you have open there. Be a shame if it was covered in popups" That would only work if the ad networks made more money off you with micropayments than they do with ads. If that was the case then you could be sure the ads would become so irritating to virtually force you to pay. Plus, instead of just having your browsing habits, the ad networks would now have your credit card details. That sounds less than optimal to me.
  • gigaflop 4y ago
    I feel like there's a way for crypto to be useful in this problem space, but I don't have faith that the actors who build such a system would be good-natured enough to make it a healthy environment, especially after all of the scammy projects that have surfaced these past few years. I think back to when people used to tip dogecoins via a bot on Reddit. It was low-friction, low-cost, and seemed to seek no rent. A similar model may work well for micropayments (instead of microtipping), but I don't have enough faith in the current web3 sphere to develop this without it turning into a scam.
• gwbas1c 4y ago
  Chargepoint: An electric car charging network. You seed your account with $20. Sometimes charging is free, sometimes it's $1-2 dollars, and sometimes it's more. When your account gets low, they bill your credit card. EZ Pass: The electronic toll network on the East Coast of the US. Works similar to Chargepoint. If you only drive a few miles on a toll road they deduct a few cents from your account.
• mjreacher 4y ago
  I'm surprised no one has mentioned micropayment functionality inside say WeChat for example.
• niahmiah 4y ago
  Everybody coming in with the lightning angle, but I just want to point out that constantly having to sign micropayments is a pain. People really want prepaid draw down of the account. Having to approve every transaction is a horrible UX, but not something you would want to automate for crypto either.
• dredmorbius 4y ago
  No, there is not. https://old.reddit.com/r/dredmorbius/comments/4r683b/repudiation_as_the_micropayments_killer_feature/ https://old.reddit.com/r/dredmorbius/comments/4r683b/repudia...
• clpm4j 4y ago
  The broader question in my mind is whether this is truly a painful problem for a large enough population of consumers.
• eliblock 4y ago
  I had an idea for a video streaming platform where people would add money to their account and be deducted a penny per minute and then publishers would get bulk payouts. Couldn't get many people interested though.
• radu_floricica 4y ago
  It helps a bit if you look at the business ecosystem as being made of various fish sizes, up to huge krakens like Facebook. And everything is sitting on a tortoise called VISA. The size difference between what we're used to think as "players" and credit card processors (and a few others) is fking huge. We don't have cheap micropayments because they don't want cheap micropayments, period. It's not going to change soon.
• rchaud 4y ago
  The point of micropayments is to make it cheap to charge for content, whenever, wherever. In that context, a $2-4 payment is not a micropayment because it's a monthly subscription fee. That fee has baked in the cost of transaction processing. Micropayments should be like cash on the Internet. No transaction fees, no filling out payment forms, and instant settlement. This would allow us to leave behind the SaaS pricing models and ad-funded models that have taken over the internet.
• 8bitsrule 4y ago
  Barter's been around longer than money. Each party in the trade has something the other party wants. No middleman. For scarcer, non-local trades, maybe there's a long-distance bartering protocol waiting to be invented. Tell what you have and what you want, and wait. Optimizing trade chains might minimize shipping/handling (but take longer). Expect bankers not to like this.
  • rchaud 4y ago
    I think you can expect many people besides bankers to not like a payment method from the Stone Ages.