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[P]
Very small amounts of money

By jep in Internet
Wed Jan 16, 2002 at 01:20:48 AM EST
Tags: Internet (all tags)
Internet

It started off as an idea somewhere inside or in the neighborhood of Danish web guru Jakob Nielsen's head. And then it grew. But however simple the idea, nobody really had the guts to take it and bring it to life. Until recently, when things took off back in Nielsen's homeland. Now all they should be worrying about is will it work?
This is the story of greed, stupidity, and very small amounts of money.


In 2001, the debate on micropayments was still carrying on at a theoretical level, it's voices simultaneously increasing in strength and decreasing in numbers with the downfall of anything dot-com. Since early 2000 micropayments had been looked upon not as an interesting, yet utopist, scenario of the future, but as something that was going to save the commercial web from dying.

Until the summer of 2001, this theoretical debate was strictly that: theoretical. But in spring, the largest Danish portal had already summoned the rest of the big, Danish, content-heavy web media and gone into action mode. Their def-con had long been in the red; they were losing money, and they were losing it fast. Over the course of a few meetings, they agreed to a proposal which was both inspired by the micropayments model and pretty far from it.

This was June 2001. Nobody really thought micropayments when they heard the proposal which, in all its simplicity, went like this: This group of portals, major news websites, and providers of sought-after web services wanted a stake in the business Danish ISPs were making by providing Internet access to the Danes. They even threatened to shut down their services for customers signed up with ISPs who didn't agree to this. Their reasoning went like this:

We are one of the main reasons people want to go online. We even affect your businesses positively by constantly improving our services, thereby making your product more attractive to the Danes. The revenue from ISP business should be divided between you who supply the infrastructure and us who supply the content.

Of course anybody with a little sense of reality could tell this wouldn't go down well with the ISPs, most of which are major Danish telcos as well. And the proposal was, of course, dismissed. But somehow the revolting web media succeeded in changing the climate with their idea. The craziness of it had the ISPs believing that they better cooperate, or maybe government--notorious for not having a clue when it comes to technology/Internet/new economy matters--would weigh in and rule that the web media were right.

So, representatives said that they were willing to negotiate and find a solution. Another model was proposed: The 1-cent-setup where an ISP were to pay a website approximately 1 cent for every minute a customer of that particular ISP spent looking at that website. Of course this was scrapped as well. For a month or so, ISPs and the web media kept clashing over proposals and models, until it had finally become clear to the web media that their strategy wasn't paying off, and to the ISPs that they had to make some effort to meet the demands of the unlucky, money-losing web people.

At least that's the impression they gave. And this was when micropayments was introduced as a practical project rather than a topic of discussion for academics and investors. But except for one, the ISPs failed to back up their words. Just one company started testing a system, and that was later abandoned. In October 2001, 40 Danish web media companies were tired of waiting. They were still losing money and agreed to go to work on a solution for micropayments on the web.

The ISPs didn't even pick up then. But the banks did. In November the largest Danish banks announced that they were cooperating on a system, funnily enough to launch on the exact same date as the web media's joint micropayments project. The banks were obviously going after the content providers, and the ball was obviously on their court. But as soon as the financial world showed signs of wanting to run the show, once again the web media decided they wanted things their own way. They told the banks to come back when they could handle the fact that this was about content, not money. Since there were 13 companies bidding for the task of constructing their micropayment system, the web media figured it was their own call which one of those 13 should do it. That, and they were afraid the whole thing was turning to a money making scheme for the banks, which could easily choose to increase their percentage of the revenue once the system was launched.

The discourse in the discussions about micropayments had now changed significantly. People were talking about how much content to leave up for grabs, how much to charge for the rest of it and whether to go subscription or real micro-style. While nobody were doubting that this would cause a huge change in the daily operations of the web media, very few people questioned the basics of the micropayment model. Not that the optimism was overwhelming though; none of the people who were going to live off of this actually talked about how much money they were going to make from it. As the thought of having to ask their loyal users for real money had slowly come closer, remarks of this kind were disappearing.

Finally, probably realizing how much money this could be about, the ISPs now joined the club. In fact it was just a few days ago that the major ISP and telco, TDC, decided to weigh in. And, maybe keeping that old grudge over the revenue split in mind, they joined not the web media but the banks, confident that now there would be no way around their micropayment system for the web media.

Apparently, there was. Meanwhile, the web media had narrowed their choices down to three companies, each one running as fast as they could to get the contract of building the web media's new micropayment system.

This system will launch around the 1st of march, if all goes well. The difficulties it's facing are immense due to bad planning, lack of compromise and old grudges which might re-ignite once the competitors (TDC and the banks) become involved. One of the first attempts at micropayments on a big scale faces an uncertain future.

Be sure to watch this space as news on the development will be posted below in a few days.

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Poll
Why won't micropayments succeed?
o Because too many different organisations and companies want to control them 42%
o Because they are against the nature of the web user (be sure to argue more specifically in a comment) 15%
o Because they are against the nature of the web (be sure to argue more specifically in a comment) 21%
o They will, believe me! 21%

Votes: 38
Results | Other Polls

Related Links
o largest Danish portal
o TDC
o Also by jep


Display: Sort:
Very small amounts of money | 36 comments (33 topical, 3 editorial, 0 hidden)
The forest and the trees (2.25 / 4) (#4)
by scanman on Tue Jan 15, 2002 at 10:53:22 PM EST

Everyone is so caught up about the pennies, when the real problem is the inconvenience. I might not mind paying a penny per page view for a site I really liked, but I wouldn't want to have to type in my credit card number and all that jazz. Why doesn't paypal offer something that would just put a box where you enter your paypal info to access a site? Most people already have a paypal account, so most people wouldn't be bothered by this.

"[You are] a narrow-minded moron [and] a complete loser." - David Quartz
"scanman: The moron." - ucblockhead
"I prefer the term 'lifeskills impaired'" - Inoshiro

inconvience known problem (4.33 / 3) (#5)
by _Quinn on Tue Jan 15, 2002 at 11:02:53 PM EST

Which is why, if I read the story right, the content companies wanted the _ISPs_ to pay them, not the users. E.g., when your proxy server serves up one of our pages, you owe us money, and you raise your rates a little to pay for it, but amortize across a lot of sites and a lot of people, so it's not as much a PITA and as inefficient as direct to consumer micropayments.

Short answer: B2C e-commerce isn't doing so well... so do B2B e-commerce, instead -- even for micropayments.

-_Quinn
Reality Maintenance Group, Silver City Construction Co., Ltd.
[ Parent ]
B2C vs. B2B (4.50 / 2) (#6)
by jep on Tue Jan 15, 2002 at 11:08:35 PM EST

the content companies wanted the _ISPs_ to pay them, not the users.

You're right. But B2B didn't work out for the media, either. No way could they have convinced the ISPs that their content-heavy websites were so important. Which, I think, is also why they'll have a hard time selling the them to the consumer.
"Wow this is my first diary entry! This diary thing should be cool! I'll update every once in a while!" (See comment #4).
[ Parent ]
Paypal? (4.25 / 4) (#7)
by theR on Tue Jan 15, 2002 at 11:16:24 PM EST

Most people already have a paypal account,

I sincerely doubt it. The majority of internet users I know have probably never even heard of Paypal. It's pretty ridiculous to just make a blanket statement saying most people already have a Paypal account.

so most people wouldn't be bothered by this.

Of course people will be bothered by having to pay for something they did not have to pay for previously, in addition to being bothered by the inconvenience, which will still be greater than the current amount of inconvenience due to paying for web sites.



[ Parent ]
Paypal? (3.00 / 2) (#10)
by Gyles on Wed Jan 16, 2002 at 06:09:25 AM EST

Doubly so if you're not in the US - they're very US centric.

[ Parent ]
This could almost be inevitable (4.50 / 2) (#8)
by Sheepdot on Tue Jan 15, 2002 at 11:58:36 PM EST

A good analogy of this could be 900 numbers, but the customer is still the payer in that instance.

Ultimately I think it comes down to bandwidth issues, and when you have the ISP footing just as much bandwidth as the website for a connect, there isn't really any way to justify one paying the other money.

Unfortunately, in locations where Internet service is mainly used to connect to other sites within the country, stuff like this can and will happen. If the ISPs make a hard stance, as they appeared to be doing here, they'll end up taking heat from the government when pressure builds. If they do agree, they'll be able to set their own terms. Naturally they agree, and take what little hit on their profits exists.

The way to break the trend IMHO would be to design a system that offers the same services as some of the other big sites with maybe a few extra kicks. You then make this new system free or at a cheaper per-hit-rate, and get the ISPs to push customers towards your site over the others, through promos, setting the home-page when they set up Internet service on the customer's machines, etc.

At this point, if you can do it cheaper or garner enough money through advertising, you'll generate buzz amongst the ISPs and give the big establishments that have been around for a while a scare. The one big thing that these portals fear is something like a Google, that would offer really good service in the right language. You could implement tons of nifty features and running a sufficient site be able to charge a lower rate than they can, assuming you don't have to hire and they have overhired (which is probably the case since they are tight on funding).

The ISPs aren't really under any obligation to pay for a B2B transaction such as this. It almost seems a rather cheap way of going out to make a buck on the portals' parts, but they do what they can. Playing any type of government-invention card is a shady way to go about it though.

I can't imagine any American site that would go for something like this, but it is assured to happen to some extent in the future. Not on nearly as grand a scale, but perhaps starting as a joint venture between local businesses at a mall and a local ISP.

If done right, both can benefit greatly. Word-of-mouth from the gal at the hair salon that coupons are available on the web site giving my mother 2 bucks (US-centric monetary units, sorry) off her hair cut would give her incentive to check it out. Handing her a card to a local ISP that could get her online within the night would give her the means to fufill that desire.

The ISP would be the first she'd call, no doubt about it. She'd then get bombarded with other mall advertisements and what-not, some she might like, some maybe not, but she'll get her hair salon coupons, and won't even realize she's spent 15 bucks for one month of Internet access for a 2 dollar coupon.

Then when I come back home and explain to her what she just did, her response is: "Oh, well, its about time we got Internet access anyway." Then, she'll continue to use it once a month for her dang hair salon coupon. :)

Sounds like my mom, but in reverse.... (4.00 / 2) (#13)
by Elkor on Wed Jan 16, 2002 at 09:03:02 AM EST

She would find someplace that would give her $30 in coupons and then never visit it.

Or, make my father do it.

Regards,
Elkor


"I won't tell you how to love God if you don't tell me how to love myself."
-Margo Eve
[ Parent ]
Millicent has been around since 1997 ... (4.50 / 2) (#9)
by joegee on Wed Jan 16, 2002 at 01:12:23 AM EST

... http://www.millicent.com/home.html

Here's an excerpt from an article published by UC Berkeley's School of Information Management and Systems, ©1997.

From someone's bookmarks in Germany comes a really exhaustive set of links to digital payment/ecommerce systems.

<sig>I always learn something on K5, sometimes in spite of myself.</sig>
This is different (none / 0) (#11)
by jep on Wed Jan 16, 2002 at 06:18:08 AM EST

Maybe so. But it doesn't seem to me they're very popular. And that, I guess, is also one of the reasons a semi-official version of the micropayments model is being introduced here.

They so hope it's going to be popular, and they're trying hard:

They have every business start charging simultaneously (would you pay for reading a story in the New York Times if it was free in the Wall Street Journal?). And they try to convince consumers to go for it by implying that there are no other ways of obtaining news and information in this here strange language we speak (of course there is, and always will be).
"Wow this is my first diary entry! This diary thing should be cool! I'll update every once in a while!" (See comment #4).
[ Parent ]
This system is imposed ... (none / 0) (#14)
by joegee on Wed Jan 16, 2002 at 09:28:42 AM EST

In a word, yuck. :( Basically they are trying to hold you hostage using your language? It's time to get ahold of your parliamentarians ... :(

<sig>I always learn something on K5, sometimes in spite of myself.</sig>
[ Parent ]
Globalization (3.00 / 1) (#15)
by jep on Wed Jan 16, 2002 at 09:50:02 AM EST

Yeah, that's the one thing they've missed taking into consideration: Globalization. This could mean the death of Danish web media when users migrate to other sources which are still free. Danes are known to be quite fluent in other languages, especially English. And what's the buzz in sticking with a web that covers only a nation of 40.000 square kilometers and has only 5 million inhabitants, anyway?

Mind you, those are just a few of several reasons the project risks failing miserably, in my opinion.
"Wow this is my first diary entry! This diary thing should be cool! I'll update every once in a while!" (See comment #4).
[ Parent ]
The Danish are humbling ... (4.00 / 1) (#16)
by joegee on Wed Jan 16, 2002 at 10:13:08 AM EST

... in their profiency of second and third languages. What are the numbers, 95% of adult Danish citizens speak a foreign language? What never ceases to amaze me is the Danish ear for accent. However it is that Danish schools produce speakers with such well-inflected accents, with a decent command of even regional accents, I give high credit to you and your educators for superb language education.

Back to the topic, these businesses, Danish businesses, must be made aware that they are marginalizing your native language and endangering your culture. I am sorry to see this problems for your country. I suspect it is symptomatic of what we will begin to see in greater Europe as this century progresses.

<sig>I always learn something on K5, sometimes in spite of myself.</sig>
[ Parent ]
Millicent appears to be dead (3.00 / 1) (#17)
by Wondertoad on Wed Jan 16, 2002 at 12:35:05 PM EST

From the front page:

"Attention: Development efforts on the MilliCent TM Microcommerce Network are currently suspended. If you wish, you can still register your interest in MilliCent and we will contact you when work on MilliCent resumes."

[ Parent ]

Millicent is a dot UXB? (none / 0) (#18)
by joegee on Wed Jan 16, 2002 at 02:12:27 PM EST

It's an unexploded bomb? By the text on the Millicent home page they have apparently suspended work until net companies stabilize. Honestly from a consumer's standpoint I would hope the micropayment system as conceived by Millicent would fail.

Back on topic it would appear that Denmark is creating a usage tariff for speakers of the Danish language modeled on a system that basically never caught on. Although offering all content in all languages is not practical, I don't like Denmark's approach being applied to other smaller languages. I think it might contribute to making Danish a second-choice language in its native country, which would be sad.

<sig>I always learn something on K5, sometimes in spite of myself.</sig>
[ Parent ]
They have micropayments in Japan (4.00 / 2) (#12)
by sera on Wed Jan 16, 2002 at 07:36:09 AM EST

... only they're not for web content; they're for DoCoMo.

People don't know what much about DoCoMo outside Japan, but basically it's online services available through really cool high-color display cell-phones. It's extremely common, and really useful. By all reports, it blows that WAP shit out of the water.

The way it works is like a long-distance phone call; you can consult rates beforehand, but it's assumed that when you use it you know you're being charged incrementally. The charges show up on your phone bill at the end of the month.

Everybody keeps thinking you'll have to give explicit permission to be charged every time you enter a micropayments-funded web page. I'm not sure why we should assume that. People are metered by lots of things -- water, electricity, gas, long-distance phone calls, cell-phone service -- and they don't need to explicitly say yes or no all the time to that.

Yes, it is more complicated; if you put micropayments on the web, the zones will be fragmented, rates will be different, and you'll probably never include all the pages in the same billing scheme. I think the best option would be to have browsers that don't suck, so you could set them to warn you this stuff. You could set your settings to something like "I think networks A and B are good, but network C usually sucks so warn me before letting me be charged from them, and network D charges too much so warn me there, too."

firmament.to: Every text is an index.

web not meterable on a time basis (2.00 / 1) (#25)
by gps on Wed Jan 16, 2002 at 09:02:21 PM EST

phone companies love to charge based on time and per use fees. that's all they know how to do. they've been doing it for over 70 years. those are not micropayments as they all go to one big place: the phone company.

real micropayments mean that anyone can pay anyone a fraction of a cent without a central authority being involved.


[ Parent ]
web not meterable on a time basis (none / 0) (#36)
by sera on Mon Jan 21, 2002 at 09:24:03 AM EST

real micropayments mean that anyone can pay anyone a fraction of a cent without a central authority being involved.

I guess I'm not clear what you mean by "central authority", and why you think the distinction would be useful. Would you consider a credit card company a central authority? PayPal? The Federal Reserve?

In Japan, DoCoMo collects the fees for the content providers, and then distributes them, as if it were a newspaper paying to subscribe to the Associated Press' newsfeeds. It's definitely not user-to-user, if that's what you mean; you have to set up a big commercial website, and then get approved by DoCoMo, to receive these micropayments.

Still, I think it's instructive; it shows that given enough incentive, users will accept a micropayment structure.

As a side note, I believe DoCoMo currently makes more money on its per-packet charges -- i.e., on content that is downloaded -- than on its per-minute charges. Maybe they're more like AOL than AT&T.

firmament.to: Every text is an index.
[ Parent ]

Permission (4.00 / 1) (#31)
by Ken Arromdee on Fri Jan 18, 2002 at 02:18:45 PM EST

Everybody keeps thinking you'll have to give explicit permission to be charged every time you enter a micropayments-funded web page. I'm not sure why we should assume that. People are metered by lots of things -- water, electricity, gas, long-distance phone calls, cell-phone service -- and they don't need to explicitly say yes or no all the time to that.

It's not that the user has to explicitly say yes or no, it's that he has to decide yes or no. He's going to have to decide that on his own even if he's not actually asked any question about it.

[ Parent ]

Permission (none / 0) (#35)
by sera on Mon Jan 21, 2002 at 09:17:03 AM EST

It's not that the user has to explicitly say yes or no, it's that he has to decide yes or no. He's going to have to decide that on his own even if he's not actually asked any question about it.

Right. What I was (not very clearly) trying to address is the fact that a number of people have asked "Will people keep browsing web content if they have to think every time about the cost of downloading content? Won't it be too much of a burden on users?"

That I was trying to make is that we already assume these costs. Most people don't fret every time they make a long-distance phone call: "Oh, when did this call start? I think this call has cost me 72 cents so far, maybe I better stop at about a dollar." Yes, people take action to minimize long-distance costs, but they aren't so aware of it that it becomes a burden to think about it.

firmament.to: Every text is an index.
[ Parent ]

Anti-micropayments URL (4.50 / 2) (#19)
by Ken Arromdee on Wed Jan 16, 2002 at 05:56:54 PM EST

The Case Against Micropayments.

I have no connection to this author or site whatsoever, but I agree with most of the analysis.

Clay makes the wrong arguments in that article (4.50 / 2) (#24)
by gps on Wed Jan 16, 2002 at 08:38:49 PM EST

clay's arguments are wrong. he lumps two completely different uses of small payment schemes into one and calls them micropayments.

micropayments make lots of sense for automated systems trading finite resources (bandwidth, disk space and cpu time). this kind of thing can happen -without the users knowledge- at the next level up (corporate/service provider) thus eliminating the simplicity in pricing argument as that is an inidiviaul user thing; not a resource consuming/producing company thing.

micropayments are not intended to bring price and value decisions to the users. they are meant as a way to facilitate tiny resource specific payments behind the scenes. this works best for real resources rather than fake made up ones vaguely described as "intellectual property" (web content, music and video being the prime targets) whos owners are in the business of taking as much as they can get without exerting more effort based on the amount they receive.

I was a lead developer of mojo nation which was a P2P system that used a micro payment barter system -internally- to trade resources. we learned the hard way early on that we needed to keep all of the payment aspect away from users eyes. Initially users would immediately assume two incorrect things: (a) they should always be gaining and (b) that the payment scheme is for the specific content rather than the resources involved in delivering it.

[ Parent ]

Intention and use (4.00 / 1) (#30)
by Ken Arromdee on Fri Jan 18, 2002 at 01:28:13 PM EST

micropayments are not intended to bring price and value decisions to the users.

Why not? They're intended to bring charges to the users. If the user is charged something, he *has* to decide whether that charge is worth it; paying and deciding whether it's worth it are inextricably linked.

You might not intend that the users think about price and value, but such thoughts are an essential part of spending money. Nobody will spend money without thinking about price and value.

[ Parent ]

Minitel (none / 0) (#20)
by jet_silver on Wed Jan 16, 2002 at 06:45:31 PM EST

For years the French have been paying, and not "micro"payments either, for Minitel - and they've been getting good use out of it. The terminals are all over the place, and they have information that's useful. It's text based, thank God, so people have to -think- when they put up content.

So what's new here? The delivery pipes? Seems to me the Danes have proposed a cheaper Minitel, without requiring the thought that goes into Minitel pages.
"What they really fear is machine-gunning politicians becoming a popular sport, like skate-boarding." -Nicolas Freeling
Sounds interesting (none / 0) (#21)
by jep on Wed Jan 16, 2002 at 06:54:05 PM EST

I'd like to know more, like, what are they if not "micro"payments, and how do the terminals work? Do you have a link?
"Wow this is my first diary entry! This diary thing should be cool! I'll update every once in a while!" (See comment #4).
[ Parent ]
Seerched zee veb fur minitel france (none / 0) (#32)
by jet_silver on Fri Jan 18, 2002 at 08:20:11 PM EST

Resoolts 11 - 20 ooff ebuoot 93,800. Seerch tuuk 0.14 secunds. Um gesh dee bork, bork!

www.france.com/media/minitel.html

A Mini Yahoo
... marketplace. Thanks to Minitel, France is the only country in which both executives
and farmers have been banking and transacting online for almost 20 years. ...
www.thestandard.com/article/display/0,1151,20223,00.html - 23k - Ceched - Seemiler peges

e-mailing, minitel, web et jeux de reflexion
Téléchargez gratuitement des logiciels intelligents permettant de mieux exploiter le Web, de surfer plus vite ou d'accéder au Minitel depuis son PC. Ce ...
Descreepshun: Téléchargement gratuit du logiciel MemoWeb 3 Flash en version complète et commande des versions...
Cetegury: World > Français > Informatique > Internet > Logiciels > Aspirateurs de site

_______________

Everything above this line, including the subject, was cut and pasted from a -single- Google page (hint, hint)

-Jet
"What they really fear is machine-gunning politicians becoming a popular sport, like skate-boarding." -Nicolas Freeling
[ Parent ]
Compuserve? (3.50 / 2) (#22)
by nstenz on Wed Jan 16, 2002 at 07:16:26 PM EST

Some stuff was free; other 'premium' stuff incurred additional charges on your bill. It's just the same crap all over again on a smaller scale. Where's Compuserve now? AOL bought them out.

You could say that AOL's insane marketing tactics are what killed CS, but I'd have to think it was at least partially because you could find better stuff on the web, and you can get on the web from any provider with a net connection, including AOL. If people are charged for content, they will just move along to someplace else that's free. Why did people move to Internet Explorer from Netscape? IE was free.

The only reason this system stands a chance of working is because making the ISPs charge their users for a third party will make sure fewer of the users notice the charges. "Danish content fee? What's that? *grumble* Must be another stupid government program..." Actually, the ISPs probably wouldn't even have to show it as a sub-item on the bill, so users will be none the wiser.

That's a crappy system, in my opinion. Damn greedy bastards.

Re: compuserve? (3.00 / 1) (#23)
by StephenFuqua on Wed Jan 16, 2002 at 08:33:13 PM EST

I'm confused: which party do the "damn greedy bastards" belong to?

[ Parent ]
That's simple. (none / 0) (#26)
by nstenz on Wed Jan 16, 2002 at 10:45:55 PM EST

The corporate monopolistic party.

These content providers, ISPs, and banks are trying to get a monopoly on the web sites, net access, and micropayment systems so they can get more money out of the users.

On the other hand, if the users want the content badly enough, they'll pay for it. I just think they should know they're paying for it ahead of time. With premium services, at least you know you're subscribing to them- you choose to. Bury some micropayment charges in your monthly net access fee, and no one will know. Brilliant. Just brilliant. And crappy.

[ Parent ]

Re: who the damn greedy bastards are (none / 0) (#27)
by StephenFuqua on Thu Jan 17, 2002 at 01:38:07 PM EST

Right, that's what I thought the answer should be too. It just wasn't clear to me from the parent posting. I actually thought at first that the content providers were being called "damn greedy bastards," which really threw me for a loop...

[ Parent ]
Content providers are jerks... (none / 0) (#28)
by nstenz on Thu Jan 17, 2002 at 05:46:29 PM EST

...not giving everything away for free. Sheesh.

Hehe. Sorry if I wasn't clear about that at first.

[ Parent ]

I don't see what the problem is! (5.00 / 1) (#29)
by tzanger on Thu Jan 17, 2002 at 11:33:57 PM EST

The pr0n industry has been doing this for ages and has it completely right. Go look at AgeCheck or any of the other bigger AVS systems.

People want convenience, so you set up an affiliate network which has a single logon and a number of credits in the system. Then you can visit any site within the network and the micropayments are automagically deducted.

How do you keep it secure? Ever hear of SSL and client certificates? When you register you get your client certificate set up. Everything falls into HTTPS, which is really something we should have been moving much faster towards in the first place. (de-facto encryption)

The affiliate networks wouldn't have to have humongous bandwidth requirements because you simply wouldn't have to contact them for ever transaction. Cache it and yes you run the risk of running over an account by a dozen/hundred or so micropayments but the caching could be two way; if user 'x' is running low their updates are pushed to their y most frequented sites. Don't forget that there is a very high chance that the user will dump more money in to this service; it's not usually a one-pay thing. Credit card companies do this and so do many bank chequing accounts. It's a non-issue.

An example of what I'd consider a valid affiliation: OSDN, K5, Tom's, Ars, Kerneltrap. Of course, any site could be part of any number of affiliate networks.

Of course you would have to have integrity: user data is NOT sold and email addresses/etc are NOT shared with the affiliated sites. You get a random UID, maybe a hash of your billing data with a login to create a certificate; the affiliate sites know nothing else and have no need to know anything else. The affiliate network makes money for itself from site registrations (yearly fee or a % of the registered user hits, something like DNS fees), or maybe even a user fee for joining. Hell, incorporate the ability for a site to charge shopping carts and stuff (macropayments) to the account and reduce the need to have credit card data flying around on the network. Of course, this would be a higer fee for the site to use this feature, and maybe a break on the user registration (since we can make money off the interest of millions of dollars which get spent fractions of a penny at a time).

I'd love to set something like this up (and this is now prior art, so no patenting) but I can't do it alone and frankly, I like creating things, not running them. Let me know if you want to get together.



Plenty of options (4.00 / 1) (#33)
by vastor on Fri Jan 18, 2002 at 11:06:25 PM EST

The channel system is probably easiest - you just join the Blah network and can access all the sites within it (same as the porn sites do).

Coming up with a money distribution formula is probably the tricky bit. I've on and off been thinking about a more general system that'd let you support things such as the EFF or the development of apps as well as content websites.

I was working on a reasonably complex system for the distribution, however something simpler like $30pa paid, access to all the sites with eyeball time/downloads adjusted on a negotiated ratio with the central organisation. So something like kuro5hin might only get 1c per 100hrs because it has low costs, a music portal might get 2c per mp3 downloaded while tomshardware might get 1c per 75 hours because they do some actual research. I'm not sure how the orgs like EFF would fit into this lighter model, perhaps get to select a ratio of unspent money goes (so if 20 people say EFF, 10 greenpeace and 30 Mars Or Bust, then whatever money is left over at the end of each month/year gets split up 50% to Mars or Bust, 1/3rd to the EFF and 1/6th to Greenpeace). You could give each person 10 votes to handout incase they'd like to give them to different organisations and the ratio determines the handout rate.

Personally, I think KISS is a good thing and would probably go for a simple one click registration at a site (so you'd say become a member of kuro5hin, it'd pass you to the central site which would check your password etc and then pass you back to kuro5hin which may issue you with a cookie or do whatever else it fancies, that way authentication only needs to take place very rarely infrequently between the central site and the content providers).

Users could quite possibly get to rate their own value of sites they frequent in the network, though I'd think some kind of negotiated default is still a good idea. The big problem is balancing fairness with ease of use and administration (and places that cry poor... kuro5hin for example seems to have much more hardware than it ought to need for what it does, so you couldn't just go on a site claiming their costs are $X when a similar site is doing fine on $X-20 percent).

I'm not familiar with client certificates, but wouldn't that cause problems for people using multiple web browsers/machines etc? I guess it'd be no more inconvenient than cookie solutions, though getting rid of a certificate may be trickier. Can't say I'm a great fan of a token/points based system for each user, makes for a lot more admin work and a more complicated system for people to understand. But I suppose it depends what you want - a system like paytv where you get access to most of the channels straight up or one where you're just doing pre-paid to see the specific movies you want. Maybe a hybrid would be best (just like on pay tv), plenty of general places you can visit open slather, maybe include a few tokens to higher rate sites and if people nominate to pay extra then they can.

I seem to remember taking a look at some of the adult pay network schemes a few years back when I had a binge into micropayments etc (almost had a go at setting up one myself), one of them would let you setup your own site specific access charges, so you could use that as a core for an easily implemented system of your own. They get a 25% cut or whatever, those in your network pass them via your site which is covered via the adult organisation and you mostly just have to worry about divying the money up (though the one I saw was inflexible - people would have to nominate a $5/month type arrangement rather than get billed/make once off token purchases).


[ Parent ]
This type of payment is not new. (none / 0) (#34)
by The Amazing Idiot on Mon Jan 21, 2002 at 12:01:56 AM EST

This idea of internet micropayment is not a new idea at all. If anybody has ever heard of a project called Xanadu[xanadu.com], they beat the idea of hypertext, relinkable copyrighted materials, and the concept of how a micropayment system would work. Many I have mentioned this to hates this since it allows any work on the web to be 'priced', however it allows the authors to choose the prices themselves so that authors can recoup time spent. On a very old Slashdot article, one person mentioned that this would be similar to a meter like on Kinko's printers. However, This meter can also run the other way. Essentially, this system was so that you could surf 'for free IF you put back something different than you took'.

Quoth the article,

"Since early 2000 micropayments had been looked upon not as an interesting, yet utopist, scenario of the future, but as something that was going to save the commercial web from dying."

And what was the Internet before .Com's were allowed in? Educational information and government sites. Now what do we have in the commercial web? Banners, Popup ads, Popunder ads, engrained flash ads, commercial spyware, misleading/trapping links, ad absurdum... Evidently these corporates cannot afford, even with those annoyances, still cannot make money. In 1999, we all saw what happened when companies TRY to stay afloat by banner ad selling only. I believe we call it the .BOMB .

Now yet another question... Micropayments for what? We can get news anywhere, computer sites ALWAYS do reviews on hardware, movie reviews are free too since they encourage to go see movies... We already pay for services used in one way or another. Ebay gets its money from taking a cut off the buyer. Yahoo has its own online store and feeds banners for its own services. As the article had before me, the porn industry charges a hefty fee to enter 1000's of sites. College documentary accessed online costs scads of dollars, hence why colleges have access to it (they can afford it), we cannot.

When corporate can offer true knowledge on the web, we will buy. Until then... Good luck.

uhh... The Amazing Idiot

Very small amounts of money | 36 comments (33 topical, 3 editorial, 0 hidden)
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