Micropayments - It Is Time | Hacker News Reader

Micropayments - It Is Time

alexwilhelm.com

7 pointswarkaiser16 comments

People need to get over free.

I like free content very much. Still... maybe we already have micropayments, but they aren't evenly distributed yet.

The current generation of gaming consoles does something close to micropayments and scrip at the same time, through their online shopping points. They solve the transaction cost problem by making you buy $20 worth of points at a time (I bought 15 Nintendo points for World of Goo, and then blew the change on an impulse buy - a copy of Opera). Points also solve the resistance problem, by having a captive audience of users who want what they offer.

The next step might be to allow game review sites to accept Nintendo/Sony/XBox points for access to content, demos, trailers, etc. At the same time, that would tie them more closely to the console manufacturers. More mainstream channels could follow as they see fit.

> They solve the transaction cost problem by making you buy $20 worth of points at a time...

The transaction fees on a one time purchase of $20 is cheaper than on 15+5 or $1 20 times or even $0.05 400 times. The problem then is if the users would pay that much in advance, or if you can wait until that much as accumulated until you charge them for it. Then again there are services like tipjoy that manage that for you.

Thats the way that I see it. You get charged at the end of the month or whatever.

PayPal does this, and allows for easy micropayments, and to my knowledge nobody is making much off of it.

Just wanted to throw something out there as food for thought/discussion starter.

In my opinion, the current argument that people demand free content and will not pay seems to me to be a lot like early Internet (even pre-internet BBS) users who said the Internet wasn't the place for business. That obviously has proven wrong. I think the "people will not pay when they can find it free" theory will prove to be wrong too.

I think there is plenty of proof that people will pay for things on the internet. However, micropayments, especially "1 cent to read a blog," etc, are worthless. Content is not worth a penny and the hassle of a microtransaction. Your content is either worth at least one or two hundred times as much (aka a buck or two), or it's worth nothing and should be posted for free. (Or you should be otherwise bundling your content up into large enough chunks or highlighted portions that the payment is worth your customer's time to make.)

Price as barrier to entry is less of a concern than people think. The real issue for customers is the presence of a new container of content which must be paid for. It's getting over the barrier of actually paying that's an issue. If you have something of value, and make the barrier of entry to unlock the content via payment extremely low, people will pay for it.*

The "If your content isn't going to be free it had better be DAMN CHEAP!!!" mentality comes from the very loud, very wrong Slashdot-types who said the iPod would fail because it wasn't $89 and iTunes Music Store songs weren't gonna sell unless they were $0.15 each. They seemed to do fairly well. People are used to capitalism. A good price -- when paired with a good, desirable and confidently presented product -- indicates quality.+

If you tell your customer that you think your blog post is worth a penny, or that your newspaper is worth 5 cents, (plus the time it would take to actually pay for the product) why on earth is a customer going to think there is any merit to your content?

* Even a pre-signed in one-click "deduct a $0.05 from my microtransaction purse" is a barrier to entry. It's a small one, but you're still asking people to commit to buying something.

+ Obviously by "a good price" I mean a price which isn't so stupidly high that everyone has decided you're ripping them off, or a price so low that you are presenting your product as below-par, a knockoff, or otherwise worthless.

Yeah, I see what you are saying. But what if it was an automated system? No click purchasing to trusted websites where you knew the rates?

Would anyone but the sort of person who reads sites like HN go for that? It seems like you would need a lot of training and a lot of trust (or wait for a new generation of humans to grow up) for that to take any mainstream hold, without SOME initial gateway. I mean, even if there were some sort of central PayPal-type system, you'd have to login or click "enable" at least once on any new site. "Enable paying for stuff. [x]"

A truly gateless ("zero click?") system which would just start charging your card the moment you landed on a page would obviously alleviate that issue, but that would imply a (probably currently impossible) amount of trust in content providers.

All that aside, I'm still not wholly convinced the numbers will work out for microtransactions at that low a cost even if people would go for it. I'm glad people are having the discussions, because obviously people need to continue to crack how to make money off of content that isn't a commercial song, TV show, or piece of software, but I'm wary of this particular proposal.

I wouldn't mind enabling paying for sites I used a lot.

Providing people with a record of the charges and an easy dispute mechanism both sides could trust would alleviate some of the trust issues with the content providers. Content providers who got dinged too often could be banned from using the service.

just asking out of curiosity: wouldn't $1 still qualify as a micropayment as well, i.e. a charge easily consumed by processing fees alone? as much as half of $1 easily goes to fees until you aggregate-charge the buyer (if that is even feasible).. and even amazon fps and paypal fee schedules are not that cheap.

I do remember someone bringing up how Apple does micropayments (a la iTunes Store) and Apple charges once or twice in the beginning and then aggregate-charges the rest anywhere from the same day to a few days later. Most places interested in micropayments don't have that kind of luxury of users who will store credit card numbers and buy things on a regular basis..

Yeah, it's been time for them for 10 years. Those and fuel cells in cars. It's a race to see which one humanity realizes is pointless first.

If there wasn't a financial cartel blocking new players with regulation it would probably be very easy to [implement] and in many different ways.

Fuel cell cars and many other technological attempts at fixing a major problem get a minuscule crumble of the pie. Perhaps the waste is mostly on mainstream media and reader/watcher time. Who cares, that was time and resources lost.

Now my attempt at a red-herring: those particle accelerators sure waste money for some meaningless questions.

Isn't it more the government in their attempts to prevent money laundering that makes micropayments too painful?

The financial and credit card cartel have some trillions to loose. Just ask the microfinance players. For example, Grameen has been receiving attacks for decades from both government (via World Bank) and private sector, with every possible block and type of scandal you might think of.

Right, but the main hindrance to micropayments seems to be the immense effort funding your account directly from a bank account. This is caused by the KYC laws instituted by the government to prevent laundering.

What has been described here really isn't all the different from what much of the online community has been railing against with net neutrality - content providers controlling content distribution by price per use. Really if a blog cost you 1 cent to read and a news article 5 cents then who is price controlling this?

You mentioned it would need to work across several platforms, but there needs to be an organization or company in charge assign prices, collect money, redistribute it, and take a little (or a lot) off the top for their services. In old or 'real world' business models this would be akin to a publisher, label, or other content provider. This is the exact thing that the internet has inherently undermined in many ways by making content distribution available to the individual.

Don't get me wrong, in many ways micro payments are enticing, but a completely new business model will have to emerge for them to work on the internet. I don't have a better suggestion, but then if anyone did you wouldn't be writing a speculative entry on the matter.

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