I don't know much about the technical reality of it, but I've thought that an effective micropayments system could be revolutionary, one of thhe most important innovations in tech:
1) It could be a way of financing an incredible amount of essential work that current funding models fail, because the payments are one-off and not worth the high trasaction costs (in fees and user time). Think of art (how do you pay for an amazing digital image) to music (pay for one song) to journalism (how do you pay for one article) to games to FOSS code to expert Q&A to much more. Financing these endeavors could lead to much more and much better.
2) It can solve much of the privacy problem, assuming the micropayments are cash-like and not tracked. I hope anonymity, which you mention in your comment, and all aspects of confidentiality are being designed and built in as core functions.
3) It could enable automated rights clearinghouses in many fields. Do you want to use part of that code/song/etc. in your work? No need to contact the rights holder and negotiate a contract, an impossibly high transaction cost for most, just use the micropayment system. Much of art in the digital age is, or should be, collage. As they say, 'good artists borrow, great artists steal'.
In my mind, it could be the most important IT innovation for culture, code, and many other aspects of society.
(key takeaway from that article: people are moving away from micropayments where they already exist (e.g. music) to subscription models. It doesn't work)
Blendle is NOT micropayments. I looked at Blendle the other day when someone posted about it. Blendle wants you to pay 25 cents for an article and then, after reading about it, think and decide if it was worth the money or if you want a refund.
First, micropayments are less than a penny (the "micro" part). Anything 25 cents is just a payment.
Second, 25 cents means I can quickly bump into my monthly/yearly maximums and have to start cutting back on my reading each month and year end. I don't want to go each October-December without being able to read the web just because I overspent on marginal articles earlier in the year.
The model that will work (for me anyway) is one like Netflix. I pay essentially a yearly fee and can consume as much as I want. Bingeing, if you will, when I desire. But only if, again like Netflix, a significant portion of the web is included. If I have to pay for five or six subscriptions it's a no-go because it gets too expensive.
Right. The micropayment needs to be about the same as the ad income would have been. And it needs to be virtually automatic. Just a pop-up saying that reading would cost $0.013 and asking for confirmation. There'd be a browser plugin that handled payments. And payments, of course, would need to be anonymous and not trackable.
I'm sorry, I have to disagree about micropayments. For most people (including people in finance), micropayments are anything less than 1 dollar. $0.25 is most definitely a micropayment. The reason is simple: with any payment processor, your per-transaction fee is something like $0.30 + 3% of the transaction. So a $0.30 sale nets you zero, because it's all taken up by the fee, and anything less than that will cost you money. For transactions under a few dollars, these fees are absolutely prohibitive.
So even for things worth a quarter, a real micropayment system would be a boon.
Now, the problem with things like Blendle, the iTunes store, etc., is that even with my definition of micropayments, they're not that useful, because they lock you into that vendor: you have to have an account with them, and you basically have a "tab" with them (much like going to a bar) that you build up, and eventually get billed for and pay all at once, so that they don't get socked with giant fees. This, obviously, only favors large players: Apple can afford to sell you $1 movies and songs this way, because it keeps you coming back to their store, but this doesn't help sellers who want to sell stuff on their own, outside of some giant player like that (who of course takes a gigantic cut of the proceeds for selling on their store).
A real micropayment system would let buyers and sellers exchange pennies at a time, with extremely low fees. PayPal got us a little closer to this by letting small sellers easily establish an account and get money from buyers (using their credit cards), without having to pay huge fees for a traditional merchant account. But PayPal gets socked with the same fees from Visa/MC as everyone and passes them on, so you still have to pay the same $0.30+3% per transaction. A micropayment system would have to bypass Visa/MC altogether. We'll never have micropayments, or lower fees of any kind, as long as we're stuck with the Visa/MC cartel.
Good points.. One part of the solution is even to get rid of all bank involvement in the micro transaction itself. A prepay approach helps you doing so. The second part of the solution is to still not drop essential aspects such as security to still maintain the claim of being a payment system. This is what we have done at milliPay in Switzerland. If you are interested in having a chat, let me know. Best, Gerrit
Subscription models and micropayments are not mutually exclusive, as in Spotify - you pay a subscription fee to listen to unlimited music. In practice that is the same as paying a fraction of a cent to the artist each time you listen to a song.
I would be willing to pay for a service that tracked each site I visited and billed me at the end of the month at a price-per-pageview comparable to CPM prices today.
EDIT: This is very distinct from asking me to pay 20 cents each time I want to open a particular page. The time I would spend considering whether to open a particular page or not isn't worth 20 cents, without regard to the fact that 20 cents/view is easily 100 times over the going rate for a page view.
Micropayments have been the holy grail online for which everybody from the core web protocols working groups, to IBM to Ted Nelson's project Xanadu have been searching. It's a tricky one to solve, but with the emergence of cryptocurrency tech, there seems to be new hope.
I'm currently involved with a project called SatoshiPay (https://satoshipay.io/), which tries to solve just this headache by enabling micropayments (down to fractions of cents) from a Bitcoin wallet that's created automatically straight in the browser. Still early days, but I believe this could be a user-friendly solution to the micropayment problem.
I don't know much about the technical reality of it, but I've thought that an effective micropayments system could be revolutionary, one of thhe most important innovations in tech:
1) It could be a way of financing an incredible amount of essential work that current funding models fail, because the payments are one-off and not worth the high trasaction costs (in fees and user time). Think of art (how do you pay for an amazing digital image) to music (pay for one song) to journalism (how do you pay for one article) to games to FOSS code to expert Q&A to much more. Financing these endeavors could lead to much more and much better.
2) It can solve much of the privacy problem, assuming the micropayments are cash-like and not tracked. I hope anonymity, which you mention in your comment, and all aspects of confidentiality are being designed and built in as core functions.
3) It could enable automated rights clearinghouses in many fields. Do you want to use part of that code/song/etc. in your work? No need to contact the rights holder and negotiate a contract, an impossibly high transaction cost for most, just use the micropayment system. Much of art in the digital age is, or should be, collage. As they say, 'good artists borrow, great artists steal'.
In my mind, it could be the most important IT innovation for culture, code, and many other aspects of society.