We Need To Drastically Simplify Payments Online

Everyone knows this. It's the no-brainer of our generation.

On the developer-side, everyone who has had the misfortune to integrate a payment provider [other then stripe] knows that the current ecosystem is not just ripe for disruption. It is begging on its knees to be extinguished.

The holdback is not the lack of fancy photoshop mockups. The holdback is the astronomic barrier of entry.

Stripe managed to partially fix the system for one country. And I've been told it took them many years to get a foot down.

There's still a lifetime opportunity here, sitting on a golden plate. A lifetime opportunity of Tolkien proportions, mind you.

The reward will be substantial for the fearless who can slay this Dragon. He who prevails will not only get the gold and the princess. He will also take the payment-crown to his lineage for many generations to come.

But beware. Countless perils, from raging paperwork to ravenous lawyers line the path of whoever dares to embark on this journey.

So. Better bring a couple dwarfs and a mage. Perhaps the cuddly mage of the sandal could be convinced to cast his mighty "umm" and open a portal for you.

"hi I bought bingo maker on my mac at school. I want to use it with my home phone number but it says it is in free trial mode. help!!!"

(She means "email address" not phone number, she doesn't know that it is irrelevant how she bought it, and you can safely assume she is incapable of finding the original email she got when she purchases the "bingo maker", which may or may not actually be the product I sell.)

Or, more worrisomely:

"sucks I can't make birthday cards with this. Give me a refund. - Cindy (bob@example.com)"

You really, really want to capture customer details with payments.

Minus the iframe, the blog author is describing Paypal. With the iframe, it's WePay. The real-world problems are:

* Users don't want to have to create a WePay/Paypal/Mastercard/whatever account. Having Mastercard run the infrastructure doesn't solve the problem - what about the people with Visa or Amex cards? The fact is, people today have CC#s and they expect to pay with those #s. Yeah, typing in your password is smoother, but there's a giant chunk of your audience that HATES <insert payment system here> and will refuse to use it. Can you afford to ignore them? No, you cannot. This is why PayPal/WePay/etc all give the option of checkout-without-login.

* Anonymous transactions don't work online. They don't even work in the case the author is using to illustrate - downloading a tv show. What if the download gets cut off halfway through? What if my hard disk crashes after downloading? Users expect to be able to get their content back. This means the purchase needs to be associated with some sort of account on the vendor's system - usually an email address. And patio11 already mentioned refunds. You can't compare the online experience with the offline experience - offline, the customer is happy when they exit the store with the physical item. There is no online equivalent.

* Vendors want some identifying information from customers. Fear of giving out an email address is not what prevents people from making online purchases. So vendors are going to demand it and they are going to get it. Anonymous transactions are a problem nobody needs to solve - except for businesses that Mastercard and friends aren't going to touch anyways.

* The hypothesis about micro-payments is incredibly naive. "But since this payment platform is handled by the credit card companies themselves, they can easily charge only a percentage, and still make just as much money." It's the credit card companies that charge these prices today! This is like saying "if Mafia bosses directly extorted local businesses instead of brokering the rights to underlings, they could charge less by cutting out the middleman!"

* The fraud "solution" (delay payments for two weeks!) are exactly what get people pissed off at Paypal. Yeah, it's a solution. It doesn't make people happy.

I have no doubt that the paypal/wepay/dwolla/etc kind of payment model will eventually dominate over "type in your credit card # and 207 other characters of information), but this is not new. It already exists. The problem is that customers are incredibly slow to adopt new payment methods.

It won't work because companies WANT your information, in order to extend their marketing capabilities to you.

Also, it turns Mastercard/VISA into a consumer-facing business, which is it not currently. And I'm pretty sure they're happy only dealing with merchants. There was a good article a couple of years ago on why Google Payments was having such a hard time competing against Paypal, and the reason was customer service. Paypal spent more on customer service than Google did (at the time, not sure about now) and this allowed the overall customer service to be better.

When you have regular people in the mix, it makes business much, much harder, and I'm pretty sure the credit card companies don't want to deal with that BS. So they're perfectly fine letting others deal with customers directly.

If they shifted to the system that the author described, all of the load would be on Mastercard/VISA, including things like refunds, etc, and that's not exactly a high-margin business.

So, it's a nice thought, but having a single point of service/privacy/failure likely won't happen with the status quo, unless a completely new merchant shows up willing to take on everything associated with payments.

This is not how interchange fees currently work. Visa/Mastercard/AmEx interchange fees are nearly always a percentage + flat rate: the exact same model as PayPal, et al.

So whilst I suppose it is true that card issuers could only charge a percentage, this proposal has no incentive for them to do so.

further, if you removed the "one-click" aspect of it, i dont really see how this is any different than paypal on a meaningful level. paypal doesnt treat merchants well, but for customers they are quite good and the process is really simple and takes only a few clicks. i have to think that if it werent for amazon's patent, they would have a one-click checkout button.

this seems like the author took an idea that was already implemented and dreamed of ways that it could be better without thinking of feasibility (e.g. assuming that the cc companies would exempt themselves from their fees so that micropayments become feasible)