> "Micropayments are desperately needed" - this is true.
Probably not. They've been proposed all the way back to Chaum's DigiCash, but no micropayment system has ever really taken off. Not just crypto schemes. Schemes to put micropayments on your cellular phone bill were a flop. Even 976 numbers never got traction outside of dial-a-porn and have mostly died out.
All the enthusiasm for micropayments comes from people who want to collect them. Not from consumers wanting to send them.
At that time, "micropayments" meant payments on the order of less than a cent. Chaum's system didn't try to do that.
I don't know exactly what "micropayments" means to people now. I get the impression it's more on the order of a dollar. But DigiCash really wasn't even meant to do large volumes of payments that small. I don't think a system like that has ever really been tried.
It's true that any kind of pay-per-use would be a hard, hard sell, though. Who wants to have to think about whether every click is worth the nickel it's going to cost? But it's also true that people don't like to buy subscriptions. So now we're in advertising hell. Which nobody likes either, to the point where a double digit percentage of users are blocking ads.
I think advertising took off because there was no coordination problem; nobody had to ask the consumer about whether to deploy it. And for larger payments everybody already had credit cards, so there was no onboarding issue.
> It's true that any kind of pay-per-use would be a hard, hard sell, though. Who wants to have to think about whether every click is worth the nickel it's going to cost?
I've heard this argument before, but there's a common existence proof to the fact that it's possible: video games. People who play many different kinds of video games (RTS, MOBA, MMO, RPG) get used to making decisions as to whether to buy things many times an hour with barely any cognitive load - their brains just get used to working with smaller units of time and money.
And why shouldn't they? I found sources online that say that a YouTube video earns about $5 per 1k views, or 0.5c per view. If I have to pay half a cent to watch a video, even a short five-minute one, that's almost below the threshold of caring, and even those making median income are probably going to be constrained by the actual time that they have available to watch, rather than the cost of the videos. People will spontaneously spend $20 to go out to eat - after the initial adjustment to a micropayment system, they should have very little trouble spending 60 cents to watch YouTube for five whole hours after work, especially if the micropayment system has common-sense features such as clearly showing your wallet balance over time, how much you've recently spent, and how much longer your balance will last at your current rate of consumption.
Now, to be fair, the fact that it's possible, and that people will quickly get used to it after they spend some time with it, doesn't mean that people will be interested in trying it in the first place, and that's a much harder problem, because subscription services are more lucrative for companies. I think the only way to get micropayments off the ground would be a grassroots movement supported by a bunch of content creators making their stuff available on a micropayment platform. Otherwise, companies that move away from ads (e.g. Google) will just turn to subscription services to lock their users in.
> They've been proposed all the way back to Chaum's DigiCash, but no micropayment system has ever really taken off.
If it's true that Chaum fucked up the deal to have it shipped with Windows 95, then this is a bad example.
Not saying it was ever "desperately needed." But being on everyone's computer by default, somebody would surely have found a use for it. Probably gambling, which is more than sufficient for bootstrapping.
Then it's a race: does the consequent acceleration of malware become such a nasty pain point that Microsoft just removes Digicash from the Windows 98 installer? Or does pets.com accept it as payment first, and it therefore becomes entrenched? :)
If micropayments were really that useful to people wanting to USE them, it would be done with steam wallet funds or steam trading cards by now. That pseudo-"payment network" is good enough for illegal casinos yet nobody has ever tried to do micropayments with it, because consumers do not want to pay slices of pennies for everything, because being nickle and dimed is literally a negative idiom
NOBODY wants to pay a penny per grain of rice. People want to pay $10 for a nice bowl full of rice.
VERY FEW CONSUMERS want all news to be stuck behind a five cent paywall before you can even decide whether it's worth that. Consumers WANT to pay for "good journalism" as an abstract service.
Even more so consumers want things free... Or as cheap as they can get...
Subscriptions are one option when they are less hassle than alternatives.
And they already know where things will end up. Now it might be cents to get something, but soon there will be adds and after that the price will go up. Probably to full units...
so put the 10 cent button in the middle, or at the end of the article?
microtransactions exist within the realm of individual video games already though. spend $10 to get 5000 in-game tokens and 150 tokens gets you better gear.
for the calorie and cost conscious rice eater, why should I pay $10 for a bowl when I'm only going to eat half? per-grain is ridiculous, but a la carte pricing on food isn't. Not everyone is a fan of buffets.
I don't want to pay for a whole newspaper when I'm just reading the whatever section, and micropayments would let me do that. Whether or not that's a good thing for the newspaper is a different question.
> microtransactions exist within the realm of individual video games already though.
Yes. That does work.
Linden Lab, the people behind Second Life, spun off their money system as a startup, called TiliaPay.[1] Tilia obtained money transfer licenses, linked up with JPMorgan Chase Payments, and offered a system where you could process a 2 cent transaction with acceptable operating costs. Unlike most "game points" programs, users can trade with each other and cash out in dollars. That's why they had to become a regulated financial operation.
It never took off. It does work, but Second Life and, to some extent, VRChat are the only real customers.
The number of installs of adblocking software would seem to contradict you. Consumers are cheap and don't want to pay for things, but they also don't want to watch ads. They also don't want 15 $10 subscriptions to things they barely use. But they also want to support creators. So there's some intersection point where people are willing to put some money in, and receive fewer and less aggressive advertisements in exchange.
The answer is federation. Don't try to sell me "subscribing to one specific blog", sell me a sensibly curated and rich network.
People might be willing to pay $10 per month for a broad spectrum of quality content, but they don't want to spend 13 cents for a given arbitrary single article. It's an annoying decision burden, even if you try to shunt it away from them with delayed end-of-month billing (constant fear of a surprise $300 bill) or a prepaid-credit scheme (where you have to still check your balance regularly).
It has to be unmetered at the moment of use -- no surprise paywall popping back up-- and it has to cover enough content that you're not reliant on "if we lose our #1 draw, the entire platform falls over".
The perfect prototype was basically the Japanese phone-book manga magazine. If you liked one or two series consistently, it was enough to justify buying the book, and since you already paid, you may as well explore the other 18 series in there to see if there's something you like.
There was something similar with Coil.com, based on the Web Monetisation API. Basically you paid $5/month, and it was shared on a pro-rata basis between on content you consumed that supported the API. Coil themselves had content lists on their website to discover, but the goal was for the monetisation to happen organically.
Most companies fail. But I think something like that could work.
It's what Google Contributor should have been. Not the bizarre v1 where your money tried to outbid ads, or the pay-per-view v2 that also only supported a handful of websites.
Google Contributor was dead on arrival by the usual issue of launching ... too small.
It could never get a following because the initial set of providers and customers would be always too limited to gain proper usage numbers which in turn would prevent it from being expanded.
There was also flattr by brokep (one of the Pirate Bay guys), which basically gave you a like button to put on your blog, and your monthly payment was split between all your likes.
> no micropayment system has ever really taken off
This is true, but it's not really the same thing as "we don't need micropayments" and "there's no configuration that would work for micropayments." Hell, ad networks are basically micropayment networks, just not for consumers, and the current economic configuration of "everything is free, we just sell all your personal data" is pretty new, so it's not like we haven't already invented new economics for the internet.
> All the enthusiasm for micropayments comes from people who want to collect them. Not from consumers wanting to send them.
Well, yes, but that's every kind of payment in the world - in just about every transaction in the economy, it's the people producing the thing that want money for the thing, not the consumers who want to pay them.
Less glibly, the current economic arrangement of the internet is eight shades of fucked. Nobody's getting paid for their work, content on the internet has sprinted to the lowest, shittiest, clickbaitiest denominator, social networks are incentivized to tear society apart so people spend more time hate-scrolling, and GenAI is coming to hoover up any of the remaining scraps individuals could've possibly been getting for their content. The fuckup of the last 50-odd years of economic policy is the monomaniacal focus on the individual as a consumer and the absolute exclusion of the individual as a producer from policy. If you want a good economy, you need to pay people for things.
The good news is there's a revitalization of just fucking paying people for things - Patreon's a good example, there's a whole lot of new writer-owned sites making good enough money to be sustainable (defector, autopian, 404media, etc), and generally there seems to be a much larger appetite for paying for things than the last 20 years of the internet would have lead one to believe.
I genuinely believe that a system in which users could easily pay small amounts of money for content they're enjoying and producers could easily get compensated for their work on reasonable terms without the friction of building a durable (subscription) relationship and without the machinery in the middle taking 30% from both sides would be transformative. We're nowhere near it, but man, we sure have tried the other ways, and they're all pretty crap.
I agree that micropayments would be incredibly desirable. If an acceptable system came around to accomplish that, I'd use it pretty heavily (as a customer).
> Well, yes, but that's every kind of payment in the world - in just about every transaction in the economy, it's the people producing the thing that want money for the thing, not the consumers who want to pay them.
Nope. Credit cards, in the form of Diner's Club, were invented by Frank McNamara, a millionaire who went to a restaurant for dinner and forgot to bring enough cash. ATMs were conceived by Walter Wriston, CEO of Citibank, because he saw too many people waiting in line at his teller windows for cash. The big push behind FedNow today is from the parts of the U.S. Government that pay out money for tax refunds, medicare, and pensions.
Yes, they are. The current dominant payment models are (1) individual patronage (which doesn't scale, and disproportionately concentrates rewards/wealthy to the very most popular creators) and (2) ads (which are incredibly problematic in almost every way imaginable).
> They've been proposed all the way back to Chaum's DigiCash, but no micropayment system has ever really taken off.
"Nobody's gotten it to work yet, therefore it's a bad idea" is a basic fallacy that has been disproven many times throughout history, especially in the past few decades, where there were many ideas (e.g. VR, machine learning, high-level programming languages) attempted in the past at points when the technology and/or market culture simply weren't right yet, that were later validated as good ideas.
> All the enthusiasm for micropayments comes from people who want to collect them. Not from consumers wanting to send them.
Yes, because free-with-ads and subscription-based services are the two dominant payment models. Both are incredibly problematic (ads come with huge privacy and coercion issues, subscription services remove media ownership and don't proportionately reward creators for their work), but because they're already established, consumers don't feel a need for something else.
This argument is like saying "All the enthusiasm for eating healthily comes from doctors who want to pitch diets to people. Not from individuals wanting to eat healthily."
Paying for individual pieces of content is clearly superior to having your attention and personal information sold to advertisers, but because ad-supported services have a price tag of zero, there's no transparency as to what data is collected and sold, and the ad-supported model is popular and familiar, consumers will choose that over a new unproven system.
That does not mean that micropayments are worse. The principled arguments for micropayments are far stronger than that of either ads or subscription services.
I'd love it if my media players/viewers just compensated artists directly commensurate with how much I consume. I'm not comfortable using a middleman for this because all of the available middlemen are giving a pittance to the artists while spending the rest of that money on technologies that make life worse for everyone. I don't want to legitimize that behavior by paying somebody for it.
Piracy + donations is often the most ethical option available today, but even better would be Piracy + micropayments on use because then it would happen whether or not I bothered to look for a "donate" option.
Probably not. They've been proposed all the way back to Chaum's DigiCash, but no micropayment system has ever really taken off. Not just crypto schemes. Schemes to put micropayments on your cellular phone bill were a flop. Even 976 numbers never got traction outside of dial-a-porn and have mostly died out.
All the enthusiasm for micropayments comes from people who want to collect them. Not from consumers wanting to send them.