Ask HN: Why aren't micropayments a thing?
Amazon aws and related services can charge you a rate per email, or per unit time of computation, so why can't news sites just charge you $0.01 to read an article, or even half that?
194 comments
People are mentioning technical & payment processing hurdles, but those are all easy to figure out. Look at the gaming industry, mobile app stores, iTunes, online gambling, toll booths, tipping on various online platforms. Micropayments are most definitely already a thing, and have been for a while.
A better version of your question is – why do newspapers charge for a monthly subscription instead of a per-article fee? The simple reason is that the numbers just don't work out. They'd have to charge a lot per article and have people pay for a lot of them to break even with the current subscription or ad-supported model, and that's not going to happen. And even if it does, there would just be too much day-to-day variance in sales. The reason subscriptions are popular is that businesses like a steady, predictable stream of revenue.
A better version of your question is – why do newspapers charge for a monthly subscription instead of a per-article fee? The simple reason is that the numbers just don't work out. They'd have to charge a lot per article and have people pay for a lot of them to break even with the current subscription or ad-supported model, and that's not going to happen. And even if it does, there would just be too much day-to-day variance in sales. The reason subscriptions are popular is that businesses like a steady, predictable stream of revenue.
> A better version of your question is – why do newspapers charge for a monthly subscription instead of a per-article fee? The simple reason is that the numbers just don't work out. They'd have to charge a lot per article and have people pay for a lot of them to break even with the current subscription or ad-supported model, and that's not going to happen. And even if they do, there would just be too much day-to-day variance in sales. The reason subscriptions are popular is that businesses like a steady, predictable stream of revenue.
What the newspapers need is something like ASCAP that can act as a single revenue management entity for microtransactions. What no one wants is to have 30 news subscriptions, and so what actually happens is everyone has ~zero news subscriptions. It's happening with video now too as Disney+, HBO, Prime, Netflix, etc. are each fighting over limited monthly subscriptions to segmented markets as opposed to Spotify, Pandora, etc. being gateways to one large market.
I don't know the details of how or why ASCAP has managed to do for the music industry what pretty much no other industry has been able to achieve. ASCAP isn't even exclusively licensed.
What the newspapers need is something like ASCAP that can act as a single revenue management entity for microtransactions. What no one wants is to have 30 news subscriptions, and so what actually happens is everyone has ~zero news subscriptions. It's happening with video now too as Disney+, HBO, Prime, Netflix, etc. are each fighting over limited monthly subscriptions to segmented markets as opposed to Spotify, Pandora, etc. being gateways to one large market.
I don't know the details of how or why ASCAP has managed to do for the music industry what pretty much no other industry has been able to achieve. ASCAP isn't even exclusively licensed.
> ASCAP isn't even exclusively licensed
I think this might actually be the innovation here. Artists can use their normal distribution channels, and also sign up for ASCAP because, why not, it's free money. If enough people do this, they become a very useful distributor simply due to the size of their catalog.
I think this might actually be the innovation here. Artists can use their normal distribution channels, and also sign up for ASCAP because, why not, it's free money. If enough people do this, they become a very useful distributor simply due to the size of their catalog.
> why do newspapers charge for a monthly subscription instead of a per-article fee? The simple reason is that the numbers just don't work out.
Is this really true though? Aren't ad prices very very low, how much do those dubious ads pay that appear next to the articles we read? Surely not that much?
Is this really true though? Aren't ad prices very very low, how much do those dubious ads pay that appear next to the articles we read? Surely not that much?
> Look at the gaming industry, [...] Micropayments are most definitely already a thing, and have been for a while.
They'll do whatever it can to make a penny in this cutthroat industry and especially on mobile, so losing a significant portion on transaction fees is better than nothing to them.
In other industries, it's better to maximize your transactions ROI and reduce them to a minimum, even if it means making the payment a bigger amount that covers a longer subscription period. They'll even offer a promotional rate if you take a yearly subscription instead of monthly.
They'll do whatever it can to make a penny in this cutthroat industry and especially on mobile, so losing a significant portion on transaction fees is better than nothing to them.
In other industries, it's better to maximize your transactions ROI and reduce them to a minimum, even if it means making the payment a bigger amount that covers a longer subscription period. They'll even offer a promotional rate if you take a yearly subscription instead of monthly.
Ultimately micro transactions make less money than subscriptions because of human psychology. When you are charged a flat rate per unit you consume, you tend to consume less because you know the cost is proportionate to your action. They receive immediate positive feedback that their consumption has a negative consequence: cost. The profit in this model is limited by not only the rate of consumption but also for the rate at which the consumer learns not to consume. With the monthly model, the cost per unit gets cheaper as the consumer consumes more of the service experience, allowing the user to “intend” to utilize more than they are paying for but in reality with a majority of the platforms userbase, the opposite happens. This leads to a system where the actual cost calculation is abstracted from the user and they are left with just the question of whether they can afford the maximum cost per time period or not.
At the gaming industry, noone i know of that plays chess has implemented this. At Lichess there millions and billions of games played each month and they don't pay with micropayments for each game. Other chess websites charge monthly fee.
Micropayments are a hassle for any system that has people, actual human organisms, being responsible for a gazillion of small transactions. The involvement of a human increases the cost of each money transaction. Only for detecting and resolving fraud a human needs to spend minutes and hours of his life, his boss has to pay him at the end of the day, and that cost bubbles up to the consumer. Minimum fees have be to many cents or dollars for each transaction, so the micropayment starts to not being a micropayment, it starts to seem very much like a payment.
The only solution to that, is a fully automated money transfer mechanism, an immutable public ledger with all the pseudonymous transactions, i.e. bitcoin. The miner network ensures the validity of the transactions, that no malicious actor in the whole network change one bit of a transaction to his benefit. Humans can do that, have done that for centuries in the banking system, by hiring trusted employees, and by following protocols to ensure the validity of each transaction, papers with stamps and all of that.
Micropayments can help for a person to change a light in the street, and charging all the residents around, a thousand of them, for 1 cent each. 10 dollars he will receive in total, 5 dollars for his work, 5 for the light bulb, and he will be paid the minute the work is done. No need to give a corrupt politician 10 million dollars, for all the work in his municipality, and the politician afterwards he will pay the technician for the fixing of the light. That creates a honey pot ready to be exploited. Micropayments can make that honeypot disappear.
https://www.youtube.com/watch?v=V1Ef6I7R0zY
Micropayments are a hassle for any system that has people, actual human organisms, being responsible for a gazillion of small transactions. The involvement of a human increases the cost of each money transaction. Only for detecting and resolving fraud a human needs to spend minutes and hours of his life, his boss has to pay him at the end of the day, and that cost bubbles up to the consumer. Minimum fees have be to many cents or dollars for each transaction, so the micropayment starts to not being a micropayment, it starts to seem very much like a payment.
The only solution to that, is a fully automated money transfer mechanism, an immutable public ledger with all the pseudonymous transactions, i.e. bitcoin. The miner network ensures the validity of the transactions, that no malicious actor in the whole network change one bit of a transaction to his benefit. Humans can do that, have done that for centuries in the banking system, by hiring trusted employees, and by following protocols to ensure the validity of each transaction, papers with stamps and all of that.
Micropayments can help for a person to change a light in the street, and charging all the residents around, a thousand of them, for 1 cent each. 10 dollars he will receive in total, 5 dollars for his work, 5 for the light bulb, and he will be paid the minute the work is done. No need to give a corrupt politician 10 million dollars, for all the work in his municipality, and the politician afterwards he will pay the technician for the fixing of the light. That creates a honey pot ready to be exploited. Micropayments can make that honeypot disappear.
https://www.youtube.com/watch?v=V1Ef6I7R0zY
That's because the average chess player would rather pay a $9.99/month subscription than pay $0.10/game. Even if they played less than 100 games a month this would be true.
Consumers despise paying for usage. They'd rather pay a monthly fee and have unlimited usage.
Consumers despise paying for usage. They'd rather pay a monthly fee and have unlimited usage.
Consumers are different with one another. I would gladly pay, for something i like, a bit more money to have some luxuries. A faster car may be it, or maybe i pay to lichess, to pair me for a game with good players, so as not to be cheated for example. Or maybe analysing my games, with some state of the art chess engine to spot mistakes or improvements. Other chess players however may not be so keen about more, just play a game and that's it.
The common solution to the flat-cost-per-transaction problem is to use not-money. Do microtransactions with company script, and buy the script in bulk units (eg 100 NYT coins for $5)
Which is generally how games do it
Which is generally how games do it
Yeah of course, but that's and IOU, it is not a micropayment. Transaction means that the money/tokens are transferred right away. In the example i gave with the light technician happens the same thing. He completes his work and it is the promise of the state that he will be paid at some time in the future. That's called IOU not a payment transaction. It is the promise given only, albeit by a big company we trust, or a state we trust. Or we don't.
> Yeah of course, but that's and IOU, it is not a micropayment
If I pay for something with a credit card, that's a payment transaction. It also involves (a whole chain of) IOUs.
If I pay for something with a credit card, that's a payment transaction. It also involves (a whole chain of) IOUs.
Look at how much money Fortnite, GTA Online, FIFA, Clash of Clans etc. are making. If there is a business justification for it then every problem you mentioned above will be solved.
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Human fraud is not an easy problem to solve. Micropayments can enable a fraudster to commit microfrauds, and by the time someone else finds about it, it's too late. The incentive of internet companies to solve it is huge, i however argue that the best way to solve it, is with an immutable public ledger fully automated which records pseudonymous transactions. Fully automated by proof of work machines, and no human involvement in the transactions.
> Micropayments are a hassle for any system that has people, actual human organisms, being responsible for a gazillion of small transactions.
When you visit any website, a dozen or so companies are charged tiny amounts of money for showing their ads to you. Charging a single entity, the reader, is much less complicated. So it's not a technical limitation.
When you visit any website, a dozen or so companies are charged tiny amounts of money for showing their ads to you. Charging a single entity, the reader, is much less complicated. So it's not a technical limitation.
In Germany there are sites like "Stifung Warentest" (a mostly neutral product testing organization) that charge one-time fees of 5-10 € for accessing test reports for specific product categories, e.g. mattresses. I bought some of these in the past, they also offer regular subscriptions but since most people are only intermittently interested in specific product tests I don't think they sell a lot of those. So it can work I'd say, just maybe not with your average run-of-the-mill 5-minute read news article.
We have something similar in France with a magazine (paper and online) that has the same business model ("60 millions de consommateurs").
Their independence/neutrality is the key differentiator.
Their independence/neutrality is the key differentiator.
Processing a credit card costs $0.02 per card, plus interchange of up to 3%. Debit processing is $0.22 cents plus 0.05%. Both of these are the baseline cost, your merchant processor often won't be able to even get these rates for their own wholesale rates.
Now try and build a micropayments ecosystem ontop of this infrastructure that is very expensive to interact with (in the context of $0.01 charges). Amazon can do it for AWS as they aggregate many small charges into one bill, resulting in the service cost not being dwarfed by the payment processing cost.
Now try and build a micropayments ecosystem ontop of this infrastructure that is very expensive to interact with (in the context of $0.01 charges). Amazon can do it for AWS as they aggregate many small charges into one bill, resulting in the service cost not being dwarfed by the payment processing cost.
The answer to this, which I am a little surprised no one has tried to implement (maybe someone has tried?), is to charge the end customer in some larger amount - say $5 or $10, and then draw down the micro transaction amount as you go. So if you could pay $5 a month (or at a time) but gain access to every article, site, video, piece of content etc, and it auto deducts from your balance then you don't have the transaction cost to manage with the CC, and you don't have the friction of purchasing. The challenge here is like any two sided marketplace - you need consumers to pay, and then you need content providers to sign on to get enough on offer for it to be worth it for both sides.
There have been several projects that did exactly that. They just haven't really taken off. Like Blendle. https://en.wikipedia.org/wiki/Blendle
I see they're moving to a subscription model now too in an attempt to make it more attractive.
I see they're moving to a subscription model now too in an attempt to make it more attractive.
I have Blendle along with subscribing to a number of independent outlets, and really appreciate it. I don't want to buy a sub for all the newspapers I might read and it saves a hell of lot of time worrying about whether I've already read too many articles for the month. It's a few cents per read, and as I don't have all day to browse the papers anyway it is very good value. I hope they, or someone like them, really succeed in the long-term. It feels good to be giving money to journalists.
>charge the end customer in some larger amount - say $5 or $10, and then draw down the micro transaction amount as you go.
Wow, I just realized why Steam does this for in-game purchases.
Wow, I just realized why Steam does this for in-game purchases.
That's also so they can deny refunds for cash balances — once you pay money to their company, you may never receive it back under any circumstances. That way they can 'refund' you games at any time, but not ever have to record a cash transaction to do so. This is, not coincidentally, universal among online video game and microtransaction stores, with the singular exception of Apple who does not compel all purchases through an intermediate currency balance.
Steam only requires the Steam Wallet for microtransactions. Games and DLC are usually bought "directly". Refunds go to the original payment method, unless you explicitly request that it should go to the wallet.
> with the singular exception of Apple who does not compel all purchases through an intermediate currency balance.
Google Play doesn't have one either, FWIW.
> with the singular exception of Apple who does not compel all purchases through an intermediate currency balance.
Google Play doesn't have one either, FWIW.
Oh! That's news. Thanks for the heads up, I didn't know that about Steam.
Pretty sure that's been the case since they started doing refunds.
My personal experience may have given me an incorrect view on it due to unusual reasons. I appreciate the correction all the same.
Bitpass was an early micropayment startup that was around for a few years. Beanz and Flooz were late dotcom era "micropayment" startups (they were more like gift certificates really) that were very well funded and failed terribly. More recently Kim Dotcom tried it with Bitcache. There are significant problems with the model.
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Isn't that basically how Flattr works?
Kind of? Doesn't Flattr have you choose up front how you want to distribute your subscription? I was imagining a system where you don't have an upfront choice to make, but that as you consume content the subscription is drawn down.
That is how most toll systems work. You load up a balance on the card $10/$20 and it deducts every time you cross a checkpoint.
The difference between this and a micropayment platform would be the fees. In the toll system, the fees are paid once. With a micropayment platform, the fees would be per transaction.
There can be a "self hosted" version of such a platform that say each content-provider can host but I am not sure it will work out against the cost of maintaining it includes much more than just hosting (securty, auditing, refunds, taxes etc).
The difference between this and a micropayment platform would be the fees. In the toll system, the fees are paid once. With a micropayment platform, the fees would be per transaction.
There can be a "self hosted" version of such a platform that say each content-provider can host but I am not sure it will work out against the cost of maintaining it includes much more than just hosting (securty, auditing, refunds, taxes etc).
This is really just circumventing the problem. As an end user, I don't want my money to be split up in to all of these random pools that private companies have control over.
This is the answer I envision exactly. The NMA simply needs to offer an annual solution. I think $50 to $100. I have always wondered why it hasn't been done before now also. They complain constantly about people reading their work for free, yet provide no honest mechanism for payments...and expect people to sign up for monthly charges to read one article. Why would anyone pay 5x, 10x to read on article in a paper they know they will not need to read again if they are just researching a particular topic and it comes up in their search results? The rest of the paper is probably dross and yet you are expected to pay for the entire thing and pay for ads etc that have no relevance to you. The quality of the paper would be forced to improve under such a system and they could no longer hide behind forced sub revenues.
I must be misremembering, but isn’t that what paypal did long ago?
From what I can tell as a lay observer, such schemes are likely illegal in the US. Excepting certain entities with specific legal carveouts or very careful navigation of the legal system such as Paypal and Venmo, every scheme that I am aware of in the US is just maintaining an account with a single provider that you charge and draw down for services from that single provider (e.g. Walmart could allow you to make a Walmart account that you can use to pay for goods from Walmart). Circumstantial evidence leads me to believe that the two key aspects that are illegal are: withdrawal (recovering your balance into a fungible form) and 3rd party payment (account is managed by a different legal entity than the entity being paid) with the latter being the more impactful of the two. The reason the lack of 3rd party payment is deeply problematic is that without 3rd party payment the account must be associated with the ultimate provider of the goods/services, so the consumer can not consolidate or rebalance their funds. Therefore, it is highly undesirable for a consumer to maintain a rolling balance which is the only reason for such a scheme in the first place.
As secondary evidence for it being illegal in the US, the scheme you are proposing is pretty much exactly what WeChat and Alipay do in China. It is also exactly the problem that Paypal and Venmo were made to solve, but for some reason they chose much more convoluted and restricted solutions even though from a technical standpoint it is harder to do what they actually did rather than the absolutely trivial technical problem of the fully featured solution which just manages account balances and transfers between them, a literal CS 101 type of technical problem.
As secondary evidence for it being illegal in the US, the scheme you are proposing is pretty much exactly what WeChat and Alipay do in China. It is also exactly the problem that Paypal and Venmo were made to solve, but for some reason they chose much more convoluted and restricted solutions even though from a technical standpoint it is harder to do what they actually did rather than the absolutely trivial technical problem of the fully featured solution which just manages account balances and transfers between them, a literal CS 101 type of technical problem.
Forgive me if this is a naive question, but how is this different from Patreon, but dolled out in smaller ad hoc amounts? Is the legal distinction because with Patreon each user chooses the distribution ahead of time? Couldn't this be worked around by creating a white list of publishers you are willing to support that approves some set limit or transaction amount ahead of time? So as an example I whitelist a newspaper, and agree to pay $.005 per article view?
I doubt that any transaction costs some percentage of the transaction's value. The true cost shouldn't differ whether I charge $1 or $10 (maybe large transactions incur extra costs for security measures). It's just a convenient way of pricing for the credit card company.
Many of the entities that process transactions do fraud monitoring. Oftentimes, the fraud monitoring has different levels of time spent depending on amount: under $10 and the system just ignores it, under $1000 and a computer uses some heuristics, and above that, it might be flagged for human review. These aren't exactly 5% of the cost of the transaction, but they do show that the cost to process the transaction does increase as the amount increases, and fraud prevention, detection, and responsibility is how companies justify charging a percentage on a transaction.
That's pricing in the risk of taking the charge. The $10 transaction is 10x as risky to a credit network's bottom line as the $1 transaction. That's also why the debit percentage is lower.
I don't think this is inherently the issue. News sites could aggregate charges and bill you at the end of the month.
I think the bigger issues is that if I see an article presented to me as shared on social media or in search results I assume it is free access. I click in, and if they ask for payment, it's a turnoff since I thought it was going to be free. Also, I don't like how credit card information can be continuously used by the organization.
I want to be able to hand an authorization for a single one-time payment to any organization and not an authorization to charge however much they want, whenever they want.
That goes for hotels too. I want to be able to say "Here's my credit card" [but I don't authorize more than $130/day].
I think the bigger issues is that if I see an article presented to me as shared on social media or in search results I assume it is free access. I click in, and if they ask for payment, it's a turnoff since I thought it was going to be free. Also, I don't like how credit card information can be continuously used by the organization.
I want to be able to hand an authorization for a single one-time payment to any organization and not an authorization to charge however much they want, whenever they want.
That goes for hotels too. I want to be able to say "Here's my credit card" [but I don't authorize more than $130/day].
Doesn't directly solve the root problem, but I use https://privacy.com for all of my online purchases. It lets you create multiple virtual card numbers, so every site I pay, I give a different card number. If any single site gets hacked, I can disable just that card. And each card can have a spending limit per transaction/day/month/year. Or, you can make the card a "burner" card that automatically deactivates after the first transaction.
Edit: I suppose that doesn't work as well for hotels specifically, at least in terms of giving a card for incidentals. Since it isn't a physical card, not sure if the receptionist would be keen on entering a digital card like that? But I've definitely used it to pay for rooms online.
Edit: I suppose that doesn't work as well for hotels specifically, at least in terms of giving a card for incidentals. Since it isn't a physical card, not sure if the receptionist would be keen on entering a digital card like that? But I've definitely used it to pay for rooms online.
Other companies also do aggregate payments (I assume for the same reason). If you buy several things from Apple (apps, subscriptions, or other things) you'll get a single charge 1 or 2 weeks later with all of your purchases.
Does it have to be a credit card? Could it not be crypto or some other option? And in doing so, would the fees be less?
How do they do it so easily in other countries?
How do they do it so easily in other countries?
As sometime who has worked full time on this for over 5 years now, I have found a few aspects of your answer:
The technical challenges of doing it with credit cards are overwhelming (in CC parlance, a "microtransaction" is anything under $10) due to fee structure.
You can simplify this by using a different payment rail (in my case, Lightning over Bitcoin), but now you have a different problem: nobody has Bitcoin.
You also need to add the lack of convincing incentive: since microtransactions don't yet exist, there's no proof that that's a market for them. That leap of faith is a significant barrier.
The technical challenges of doing it with credit cards are overwhelming (in CC parlance, a "microtransaction" is anything under $10) due to fee structure.
You can simplify this by using a different payment rail (in my case, Lightning over Bitcoin), but now you have a different problem: nobody has Bitcoin.
You also need to add the lack of convincing incentive: since microtransactions don't yet exist, there's no proof that that's a market for them. That leap of faith is a significant barrier.
Obviously you are aware of this, but here is a concrete example of micropayments in practice:
When I use (for example) Vultr cloud compute (https://www.vultr.com/), I load my Vultr account with $10 via credit card. Once the money enters the account it remains there until it is spent
Then I pay 1 or 2 cents each hour for a cloud instance. At the end of each month, Vultr tells we what's due if I exceed what remains in the account. If necessary I load more money in
This kind of simple micropayment scheme (with a trusted entity holding upfront credit card payments) is widely implemented
If you are willing to trust an intermediary (and most people are) then distributed ledgers (blockchains) are unnecessary
The benefit of Bitcoin (or blockchains generally) is that you don't need to trust anyone. In 2009 this was considered important, but today, does anyone care?
No
When I use (for example) Vultr cloud compute (https://www.vultr.com/), I load my Vultr account with $10 via credit card. Once the money enters the account it remains there until it is spent
Then I pay 1 or 2 cents each hour for a cloud instance. At the end of each month, Vultr tells we what's due if I exceed what remains in the account. If necessary I load more money in
This kind of simple micropayment scheme (with a trusted entity holding upfront credit card payments) is widely implemented
If you are willing to trust an intermediary (and most people are) then distributed ledgers (blockchains) are unnecessary
The benefit of Bitcoin (or blockchains generally) is that you don't need to trust anyone. In 2009 this was considered important, but today, does anyone care?
No
The example given (Vultr) is equivalent to a Starbucks card. You’re prepaying a company for a service. The transaction is the prepayment. How you use that balance is now irrelevant.
Micro transactions to a range of different independent businesses requires using existing payment networks (visa / MasterCard / etc: relatively expensive; crypto: lack of widespread adoption) or building a new payment network.
> If you are willing to trust an intermediary (and most people are)
We already do. It’s called the bank. We also have regulation that helps. How many people keep real money in their personal PayPal accounts? How many people can even afford to?
EDIT: I retract my Vultr / Starbucks equivalence.
> At the end of each month, Vultr tells we what's due if I exceed what remains in the account. If necessary I load more money in
Starbucks will not let your spend exceed your deposits on your card. Your statement suggests Vultr will. Credit accounts are a whole other risk. What happens if you don’t pay off your balance after you’ve already consumed the service?
Micro transactions to a range of different independent businesses requires using existing payment networks (visa / MasterCard / etc: relatively expensive; crypto: lack of widespread adoption) or building a new payment network.
> If you are willing to trust an intermediary (and most people are)
We already do. It’s called the bank. We also have regulation that helps. How many people keep real money in their personal PayPal accounts? How many people can even afford to?
EDIT: I retract my Vultr / Starbucks equivalence.
> At the end of each month, Vultr tells we what's due if I exceed what remains in the account. If necessary I load more money in
Starbucks will not let your spend exceed your deposits on your card. Your statement suggests Vultr will. Credit accounts are a whole other risk. What happens if you don’t pay off your balance after you’ve already consumed the service?
Yes, Vultr allows you to exceed the loaded amount
The difference is due at the end of the month. If I didn't pay, they would simply charge the last credit card I used to load the account (I suppose)
Another example: Linode (https://www.linode.com/) charges my credit card at the end of each month, to cover my usage. So a $5 cloud instance isn't paid for until the month ends. The point is to aggregate a whole month of spending into a single credit card payment
The difference is due at the end of the month. If I didn't pay, they would simply charge the last credit card I used to load the account (I suppose)
Another example: Linode (https://www.linode.com/) charges my credit card at the end of each month, to cover my usage. So a $5 cloud instance isn't paid for until the month ends. The point is to aggregate a whole month of spending into a single credit card payment
> The benefit of Bitcoin (or blockchains generally) is that you don't need to trust anyone. In 2009 this was considered important, but today, does anyone care?
I dont see how this is any less relevant today than it was 12 years ago.
I dont see how this is any less relevant today than it was 12 years ago.
Micro-transactions require micro-products, and those are a hard sell.
Compare a tangible market situation: remember the old Bazooka gum that used to say "3 cents" on each piece? Few customers are going to walk into a store and buy a single piece, no matter how cheap and frictionless payment is. At that level, the burden of thinking "I have to actually go and buy it" exceeds both the financial cost and likely the perceived upside of a single bite of gum. You can successfully sell a handful alongside another transaction, or a bag of them for a dollar, though, because you've raised the stakes of the total transaction high enough that it's worth thinking it through.
Maybe the classic micropayment story-- the individual news article/video view/song play-- is a single piece of Bazooka. Since it's likely to be ephemeral and competing with a nearly-as-good free alternative (the same content on an ad-based site), you don't have much room to make the case that it's worth going through a purchase process.
Compare a tangible market situation: remember the old Bazooka gum that used to say "3 cents" on each piece? Few customers are going to walk into a store and buy a single piece, no matter how cheap and frictionless payment is. At that level, the burden of thinking "I have to actually go and buy it" exceeds both the financial cost and likely the perceived upside of a single bite of gum. You can successfully sell a handful alongside another transaction, or a bag of them for a dollar, though, because you've raised the stakes of the total transaction high enough that it's worth thinking it through.
Maybe the classic micropayment story-- the individual news article/video view/song play-- is a single piece of Bazooka. Since it's likely to be ephemeral and competing with a nearly-as-good free alternative (the same content on an ad-based site), you don't have much room to make the case that it's worth going through a purchase process.
I guess this is obvious, but youtube videos and online articles are micro-products. It would be trivial to charge people 10 cents an article if people felt it would work. You would browse youtube as usual, no technical need for any extra friction at all. At most there might be a legal requirement to remind you that you will be charged.
The challenge is probably mostly that a lot of publishers would need to get together and create a unified account that could be charged.
The challenge is probably mostly that a lot of publishers would need to get together and create a unified account that could be charged.
Lightning over Bitcoin? This can't be serious, can it? LN is vaporware from day one. It serves no purpose because it is essentially centralizing a decentralized service. And when it still cost $5-10 to send BTC to a LN node, you are no better off than credit card fees.
Hilariously BTC had this problem solved from day one, then Blockstream hijacked the GitHub repo, kicked out all the original devs and artificially limited the block size to try and push people onto their own "second layer" products.
Why anyone would use LN rather than just real Bitcoin (now called Bitcoin Cash) is beyond me. They have lots of trolls (Adam Back) and social engineers (Greg Maxwell) pushing a false narrative but how real people fall for it is still just bizarre.
Hilariously BTC had this problem solved from day one, then Blockstream hijacked the GitHub repo, kicked out all the original devs and artificially limited the block size to try and push people onto their own "second layer" products.
Why anyone would use LN rather than just real Bitcoin (now called Bitcoin Cash) is beyond me. They have lots of trolls (Adam Back) and social engineers (Greg Maxwell) pushing a false narrative but how real people fall for it is still just bizarre.
Bitcoin cash? You sound clownish. Wake up and stop drinking the kool-aid buddy. Nobody goes near that scam fest, sorry.
My take is that Lightning was a stalling tactic so that the original community would give up and fragment into other cryptos, destroying the growing network effect. It seems to have worked.
>You can simplify this by using a different payment rail (in my case, Lightning over Bitcoin), but now you have a different problem: nobody has Bitcoin.
The problem is that Lightning essentially is a subscription service. The user has to lock much more Bitcoin in a channel in order use Lightning for micro transactions, which defeats the purpose. The minimum fee to get a Bitcoin transaction confirmed in a reasonable amount of time is often over $20 USD at this point. That's a very large deposit for a $20 fee to be worth the effort.
They could deposit a smaller amount of Bitcoin in a custodial wallet, but at that point you might as well use a credit card or Paypal. It defeats the underlying appeal of Bitcoin, which is controlling your own money.
More people would have, and more importantly use, Bitcoin if it was allowed to scale on-chain. Why that hasn't happened yet is a different rabbit hole.
The problem is that Lightning essentially is a subscription service. The user has to lock much more Bitcoin in a channel in order use Lightning for micro transactions, which defeats the purpose. The minimum fee to get a Bitcoin transaction confirmed in a reasonable amount of time is often over $20 USD at this point. That's a very large deposit for a $20 fee to be worth the effort.
They could deposit a smaller amount of Bitcoin in a custodial wallet, but at that point you might as well use a credit card or Paypal. It defeats the underlying appeal of Bitcoin, which is controlling your own money.
More people would have, and more importantly use, Bitcoin if it was allowed to scale on-chain. Why that hasn't happened yet is a different rabbit hole.
"often over $20" is a lie. Fee for the priority transaction (to skip the queue) is $7 right now. It rarely exceeds that amount. You don't usually need a priority transaction when funding LN channel, so ~$1 fee will be enough.
I literally transact almost every day.
To give you an example, the withdraw fee for BTC on Kraken is 0.0005 BTC, which is currently about 17.50 USD.
Here is the current mempool: https://jochen-hoenicke.de/queue/#0,24h
To get your transaction confirmed in the next few blocks, you have to be in the "yellow" of the chart, and use a fee of around 120 satoshi's per byte.
The average transaction is around 200 bytes, so you need to pay 24000 satoshis, which is 0.00024 BTC.
That's 8.40 USD right now. The problem is that it's a double blind auction, so to have a very high likelihood of getting into the next block, you often have to pay 200-400 satoshi's per byte, which puts you right up at the $20 level. If your transaction is larger, it can be significantly more.
Also, if the mempool gets even more backed up than it is right now, the fees can literally go as high as people are willing to pay when fighting over the restricted block space.
>You don't usually need a priority transaction when funding LN channel, so ~$1 fee will be enough.
If you try sending a Bitcoin transaction with a $1 fee right now it may not confirm for days and might confirm at all! That isn't a user experience that's going to create mass adoption. It needs to be an improvement on the existing options.
How, exactly, is my statement that the fees are often over $20 a lie?
You should stop accusing people of being liars without data to back it up. This forum is supposed to be for intelligent discussion, not trolling. This isn't twitter.
To give you an example, the withdraw fee for BTC on Kraken is 0.0005 BTC, which is currently about 17.50 USD.
Here is the current mempool: https://jochen-hoenicke.de/queue/#0,24h
To get your transaction confirmed in the next few blocks, you have to be in the "yellow" of the chart, and use a fee of around 120 satoshi's per byte.
The average transaction is around 200 bytes, so you need to pay 24000 satoshis, which is 0.00024 BTC.
That's 8.40 USD right now. The problem is that it's a double blind auction, so to have a very high likelihood of getting into the next block, you often have to pay 200-400 satoshi's per byte, which puts you right up at the $20 level. If your transaction is larger, it can be significantly more.
Also, if the mempool gets even more backed up than it is right now, the fees can literally go as high as people are willing to pay when fighting over the restricted block space.
>You don't usually need a priority transaction when funding LN channel, so ~$1 fee will be enough.
If you try sending a Bitcoin transaction with a $1 fee right now it may not confirm for days and might confirm at all! That isn't a user experience that's going to create mass adoption. It needs to be an improvement on the existing options.
How, exactly, is my statement that the fees are often over $20 a lie?
You should stop accusing people of being liars without data to back it up. This forum is supposed to be for intelligent discussion, not trolling. This isn't twitter.
You confirmed it yourself, indicating that the fee is $8.40 right now. No, $1 fee will not get tx stuck for days, it will be confirmed within next few blocks. If you want "data to back it up", here it is for your service:
http://letmegooglethat.com/?q=historic+btc+tx+fee+rate
I realize the issue is even less people having it. But there are chains like Tron that have the fee issue basically solved.
That's a non-sequitur. The "fee issue" was caused by a group of shady developers and hacks that hijacked the Bitcoin repository and rate limited it. When the community protested, they were censored and banned from the online forums.
>due to fee structure
Why is a little bit of data exchange so expensive? (Ok because they can, so why aren't the competitors to drive that fee structure down? What's the barrier to entry?)
Why is a little bit of data exchange so expensive? (Ok because they can, so why aren't the competitors to drive that fee structure down? What's the barrier to entry?)
The company Blockstream hijacked the Bitcoin Core GitHub a few years ago and artificially limited the block size to try and increase fees and push people to their second layer products.
Any real users and devs moved to other project like Ethereum and Bitcoin Cash, now only trolls and bag holders keep pushing BTC as a "store of value", a totally meaningless concept.
Any real users and devs moved to other project like Ethereum and Bitcoin Cash, now only trolls and bag holders keep pushing BTC as a "store of value", a totally meaningless concept.
Here's some older explanations:
Clay Shirky: http://web.archive.org/web/20060214180624/http://www.openp2p...
Andrew Odlyzko: http://www.dtc.umn.edu/~odlyzko/doc/case.against.micropaymen...
Nick Szabo: http://web.archive.org/web/20080514172459/http://szabo.best....
Clay Shirky: http://web.archive.org/web/20060214180624/http://www.openp2p...
Andrew Odlyzko: http://www.dtc.umn.edu/~odlyzko/doc/case.against.micropaymen...
Nick Szabo: http://web.archive.org/web/20080514172459/http://szabo.best....
I still think Shirky is pretty much spot-on after a couple of decades. Even when it seemed as if "midi-payments" might be getting some traction in music and apps, they've now mostly turned into either subscriptions, ad-supported, or "free to play." And arguably a bunch of midi-subscriptions (e.g. $1/month) is even worse because enough of those and they add up to a real money leak. For subscriptions, I'd much rather have a $5-15/month that is a sufficient line item that I'll spend the time to consider whether I really want this or not.
The problem is the mental overhead, not the fee. If every single article click adds an extra mental overhead of "is this worth paying for? how much have i spent this month on reading?", people will simply stop clicking. Headlines are already super optimized to get you to click. The impact of a mental tax before every click would be at least -10x a good headline and seriously puts the media company at risk of bankruptcy. A fixed fee per month is psychologically and logistically easy to manage. There may be other concerns about cost per transaction & payment networks, but they are secondary honestly.
We've seen this play out in the Apple App Store over a decade. Paid games, a dollar, were quickly left in the dust by freemium titles. Bypassing "is this worth paying for?" and replacing with "is this worth installing?" Once you are emotionally invested in a game, you pay, not before.
I agree that mental overhead is a large factor. The technical challenges to enable micropayments seem inconsequential to me.
I’d add that the very act of deciding something’s worth could cost more than the thing itself. For example, an article might be priced at $.01, but it costs me $.50 worth of my time to decide if $.01 is a reasonable price.
I’d add that the very act of deciding something’s worth could cost more than the thing itself. For example, an article might be priced at $.01, but it costs me $.50 worth of my time to decide if $.01 is a reasonable price.
I disagree. Take Youtube as an example. A ton of mental overhead: videos padded for time, clickbait titles and thumbnails, in video promotions, reminder to check their patreon, reminder to like and subscribe, interruptions for Google ads, etc, . All this adds up and makes you question if the time waste was worth the chance at maybe getting to view some decent content. A system where you are throwing a penny at somebody to unlock a video is preferable.
Not if you use SponsorBlock. Been using it for months, it greatly improves the youtube experience.
And greatly removes the way these creators can actually pay for their lifestyle of creating. Good job!
Well some of us must create the evolutionary pressure for these systems so that we can converge on a system that is not a waste of time for the consumer AND profitable for the creator. It is what it is.
The idea is akin to a driver going through a modern toll. They take a photo of your license plate and send you a bill in the mail after looking it up in the state registry. For those who registered (have an express RFID chip or similar), that process is cheaper and you get a cheaper bill that is summed up each month/quarter.
To stay strictly with the analogy, 1) what is our online license plate? 2) how would one send a bill after translating license plate to home address?
To me, these are fundamental web browser capability deficits. Tim Berners-Lee envisioned this and put some HTTP response codes in the registry with a TODO bookmark and never got around to it or something like that. It is possible but we will have to call in the committee.
To stay strictly with the analogy, 1) what is our online license plate? 2) how would one send a bill after translating license plate to home address?
To me, these are fundamental web browser capability deficits. Tim Berners-Lee envisioned this and put some HTTP response codes in the registry with a TODO bookmark and never got around to it or something like that. It is possible but we will have to call in the committee.
> why can't news sites just charge you $0.01 to read an article, or even half that
They can. See https://blendle.com/, though the going rate there is considerably more than 0.01. But that's a question of pricing, not of logistics. The way it works is that you pay a small-ish lump sum up front and then you draw down that balance in small increments. That is different from true micropayments where you can send small amounts to anyone on demand, but it's a proven model.
The real problem is that to scale this beyond payments to a fixed set of vendors you basically need a license from the federal government. You need to either be a bank or a money-transfer agent, and both of those have extremely high barriers to entry, basically insurmountable, mainly to prevent money laundering, which is the tough nut that no one has been able to crack.
They can. See https://blendle.com/, though the going rate there is considerably more than 0.01. But that's a question of pricing, not of logistics. The way it works is that you pay a small-ish lump sum up front and then you draw down that balance in small increments. That is different from true micropayments where you can send small amounts to anyone on demand, but it's a proven model.
The real problem is that to scale this beyond payments to a fixed set of vendors you basically need a license from the federal government. You need to either be a bank or a money-transfer agent, and both of those have extremely high barriers to entry, basically insurmountable, mainly to prevent money laundering, which is the tough nut that no one has been able to crack.
Is there admin overhead that gets in the way? For example, someone disputing 400 different 1 cent charges
That too, though that's actually easier to deal with than the regulatory issues because there are technological and ToS solutions here.
I read through a ton of comments and didn't see anyone really mention twitch. On twitch you can buy with credit card bits. A bit is about 1 penny. But you usually buy $5 bits incrementally. You can watch ad for 10 bits sometimes too.
You can then give anywhere from 1 bit to whatever to the streamer. Some streamers will set minimums of 5 or 25 bits. At end of month the bits are converted back to real money minus twitch fee. And they send check to streamer.
The problem really isn't in the tech. Its solved and easy. Its getting some intermediary to be used by many. New York times can't be it for itself. It needs to be something that a user buys bits or whatever and then can use a large variety of websites.
You can then give anywhere from 1 bit to whatever to the streamer. Some streamers will set minimums of 5 or 25 bits. At end of month the bits are converted back to real money minus twitch fee. And they send check to streamer.
The problem really isn't in the tech. Its solved and easy. Its getting some intermediary to be used by many. New York times can't be it for itself. It needs to be something that a user buys bits or whatever and then can use a large variety of websites.
But the thing, for news at least, is: I don't want to pre-pay 10 different news sites, that I may or may not use.
That would work if it was like: I pre-load money into a service (i.e paypal). Then I use that account to unlock articles/donate to many different sites. Then, at the end of the month, paypal (or whatever the service is) makes 1 payment to all those sites, for all users combined.
That way, instead of me transferring 1 cent, twice, to New York Times, Paypal could do 1 large transfer of all contributions.
That would work if it was like: I pre-load money into a service (i.e paypal). Then I use that account to unlock articles/donate to many different sites. Then, at the end of the month, paypal (or whatever the service is) makes 1 payment to all those sites, for all users combined.
That way, instead of me transferring 1 cent, twice, to New York Times, Paypal could do 1 large transfer of all contributions.
Because payments are a hassle.
People resent that the credit card companies take 3%, but it takes more than just 'transfer money from this account to that' but also dealing with fraudulent buyers and sellers.
In the case of you visiting a site and feeling you didn't get 0.005 cents worth of value it is very clear that somebody could perceive it was unfair. In the advertising economy, however, no one party sees the whole transaction so rip-offs can be pervasive and people don't know.
People resent that the credit card companies take 3%, but it takes more than just 'transfer money from this account to that' but also dealing with fraudulent buyers and sellers.
In the case of you visiting a site and feeling you didn't get 0.005 cents worth of value it is very clear that somebody could perceive it was unfair. In the advertising economy, however, no one party sees the whole transaction so rip-offs can be pervasive and people don't know.
For reference, there's Web Monetization [1] which tries to solve exactly that.
As others have noted it all boils down to user agent support. Otherwise most publishers probably won't consider giving up ad or subscription financed models.
Also, forcing users into subscriptions allows for better demographics data/statistics.
[1] https://webmonetization.org/docs/explainer/
As others have noted it all boils down to user agent support. Otherwise most publishers probably won't consider giving up ad or subscription financed models.
Also, forcing users into subscriptions allows for better demographics data/statistics.
[1] https://webmonetization.org/docs/explainer/
https://webmonetization.org/ lists Coil (flat $5/mo) as the first Web Monetization provider: https://coil.com/
Web Monetization builds upon ILP (Interledger Protocol), which is designed to work with any type of ledger; though it's probably not possible for any traditional ledger to beat the <1¢ transaction fee that only pre-mined coins have been able to achieve.
Web Monetization builds upon ILP (Interledger Protocol), which is designed to work with any type of ledger; though it's probably not possible for any traditional ledger to beat the <1¢ transaction fee that only pre-mined coins have been able to achieve.
I really like their approach and I paid for Flattr for quite a while when it started. But something big needs to push them to the critical adoption rate. On a number of very techy blog posts, I got... 0 from WebMonetization. And that's on best case audience (coming from HN and tech Reddit).
Accounting, transaction reversibility, and taxation.
In real life if you want to give somebody a dime, you just do it. But online you have to query your account to make sure you have enough money to make the payment, reserve the funds so the payment can go through without stopping other pending transactions, pass it the amount through some infrastructure where you can dispute the charge at a later date (if needed), and you also have to make sure the government is able to track your transactions for tax and anti-money laundering purposes.
For Amazon it's a different situation because they're charging you for a service based on usage. They have given you an account number and they handle all the accounting on their end. It's not a general payments system.
In real life if you want to give somebody a dime, you just do it. But online you have to query your account to make sure you have enough money to make the payment, reserve the funds so the payment can go through without stopping other pending transactions, pass it the amount through some infrastructure where you can dispute the charge at a later date (if needed), and you also have to make sure the government is able to track your transactions for tax and anti-money laundering purposes.
For Amazon it's a different situation because they're charging you for a service based on usage. They have given you an account number and they handle all the accounting on their end. It's not a general payments system.
People don't like to do transactions. It taxes our brains and makes us make decisions constantly. We like all you can eat and watch as much as you like. Paying for things sucks even if you just pay small amounts.
Yeah. For example, thats why people like all-inclusive hotels. The reason is that you dont have to think about the prices all the time. You just go through the package only and thats it.
The less tranactions, the better. At least for the majority of us. It is very rare to prefer doing many small transactions over one big.
The less tranactions, the better. At least for the majority of us. It is very rare to prefer doing many small transactions over one big.
Yep even if we end up paying more than we would have with separate billing, we don't care. It's a mental burden, I feel the same way.
How do you explain paywalls then?
The main reason I don't sign up for more paywalled things is not concerns about money, it's sheer inertia. Signing up takes effort, and it's yet another subscription to manage.
That extends to relatively low-friction cases like Patreon. The number of podcasters and bloggers where I've thought, quite earnestly, "I really like what this person is doing, I should kick a few quid their way," and then just not done that is near infinite. And it's never because I was feeling stingy; it's because I couldn't be arsed.
That extends to relatively low-friction cases like Patreon. The number of podcasters and bloggers where I've thought, quite earnestly, "I really like what this person is doing, I should kick a few quid their way," and then just not done that is near infinite. And it's never because I was feeling stingy; it's because I couldn't be arsed.
Paywalls typically ask you to get a subscription, not to pay for that particular article.
Everyone hates paywalls
Yes, because they want you to pay for a monthly or yearly subscription and you just want to read one article and maybe never come back to their site. But if I can do a 1-click "pay 1/2 cent" to read the rest of the article that would be totally fair
That's not the only thing. It's the hassle as well.
First they want you to sign up for an account. Give a lot of personal data. Then set up a payment model, often recurring. Just to read one article? No way.
Micropayments will save some of that hassle but I don't want to have an account with every news site linked to by HN.
First they want you to sign up for an account. Give a lot of personal data. Then set up a payment model, often recurring. Just to read one article? No way.
Micropayments will save some of that hassle but I don't want to have an account with every news site linked to by HN.
If the alternative to a x% chance of upselling someoone to a yearly subscription is "read one article and maybe never come back to their site" then the price that the vendor will want to charge for that article is x% of that yearly subscription. You mention 1/2 a cent in multiple comments, but that's not a realistic expectation - if the paywalled sites would offer a per-article payment, they would definitely want to charge much more than that for that single article, closer to a dollar or so. They don't offer per-article pricing because the currently paywalled sites can earn more otherwise - the micropayment challenges aren't relevant, they will not sell their goods so cheaply (as it would devalue and 'cannibalize' their main revenue) even if there was a zero-fee micropayment mechanism.
Half a cent per article is a plausible target for all the weak/cheap sources who can't possibly afford to put up a paywall right now because nobody would pay. It's not going to be used by the currently paywalled sites, their business model relies on getting a not-micro amount from each customer.
Half a cent per article is a plausible target for all the weak/cheap sources who can't possibly afford to put up a paywall right now because nobody would pay. It's not going to be used by the currently paywalled sites, their business model relies on getting a not-micro amount from each customer.
Thank you.
For the longest time I thought there was just something wrong with me. Rarely would you find a comment in an article about micropayments that pointed out that micropayments sound, stressful!
It causes me anxiety just having to think about having to consider making payments everytime I click on an article, for example, even if it's a tiny $0.01 amount each time.
For the longest time I thought there was just something wrong with me. Rarely would you find a comment in an article about micropayments that pointed out that micropayments sound, stressful!
It causes me anxiety just having to think about having to consider making payments everytime I click on an article, for example, even if it's a tiny $0.01 amount each time.
Really? Rarely? I remember this being one of the few top-billed reasons why micropayments "will never work", to the point where it was the #1 thing I would always have to address in every discussion of our product.
So, on such note; when you turn on the light when entering a room, do you have anxiety thinking about how that costs money? We are constantly making tiny momentary transactions without thinking about it at all: the issue is UI, not transactions.
So, on such note; when you turn on the light when entering a room, do you have anxiety thinking about how that costs money? We are constantly making tiny momentary transactions without thinking about it at all: the issue is UI, not transactions.
I get this, but also there's a class of things where we know we're constantly being charged by use, and we don't constantly think about it.
Gas, electricity, water are all cases where my use is metered, I _could_ try to micromanage it on a daily basis, but so long as my bills don't vary wildly from month to month, I don't pay especially close attention. To the degree that I self-regulate my use, it's more about the environment than the dollar cost. I don't think about it every time I take a shower or turn up my thermostat.
The amount of online stuff from for-profit institutions I read from month to month doesn't vary that much, and if I knew from habit what the typical range was, I think I could learn to be ok with that. But the current experience, where whenever someone links to something in a _different_ paywall than the ones I'm already in, I do have to think "would it be worth it to pay for this source?" and often the answer is "no".
Gas, electricity, water are all cases where my use is metered, I _could_ try to micromanage it on a daily basis, but so long as my bills don't vary wildly from month to month, I don't pay especially close attention. To the degree that I self-regulate my use, it's more about the environment than the dollar cost. I don't think about it every time I take a shower or turn up my thermostat.
The amount of online stuff from for-profit institutions I read from month to month doesn't vary that much, and if I knew from habit what the typical range was, I think I could learn to be ok with that. But the current experience, where whenever someone links to something in a _different_ paywall than the ones I'm already in, I do have to think "would it be worth it to pay for this source?" and often the answer is "no".
Very nice points. People are not that averse to metered pricing. There is a strong aversion towards unpredictable charges.
The difference is that (1) metering is mostly done for limited resources and (2) you don't really have a choice but to not mind for any of the services mentioned. If someone came about and offered a flat-fee electricity connection, the majority would switch in an instant even if their bills remained about the same.
Many utilities in the US have this. The utilities charge a fixed monthly fee based on estimated usage. Each year the amount is adjusted based on the previous year. It's not that popular overall but serves lower income households well.
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maybe whats needed is a system that tallies up the sites you've visited and at the end of the month you can just say, allocate 5 bucks among them. Or if you've had a rough month, maybe don't give anything. Maybe you can distribute you payments once a year. Or make slight adjustments to it and not give a site any money if you feel.
There've been several projects that did exactly that. Like Brave with their BAT tokens. But it never took off.
Personally I don't like them because these things don't normally opt you out of ad tracking as well. When I pay I want to be the customer and not be tracked. I also don't want to give any personal details. They know nothing about me when I buy a newspaper in the shop. It should be like this :)
Personally I don't like them because these things don't normally opt you out of ad tracking as well. When I pay I want to be the customer and not be tracked. I also don't want to give any personal details. They know nothing about me when I buy a newspaper in the shop. It should be like this :)
Yeah, this is sort of a deal breaker. Another response to my original comment was a link to Flattr and from wikipedia it's a site "that records which websites they frequent and shares this data with Flattr" -- no thanks.
Why do you say Brave tracks you?
Not Brave itself, but the sites that you visit don't have to give up tracking per se (for participating users, of course). They should have to in order to participate IMO.
Brave will block tracking to some extent but we know it's not perfect.
Brave will block tracking to some extent but we know it's not perfect.
Aren't micropayments on mobile platforms a big thing in India, China, and Africa?
Practically things like Spotify and Netflix are microtransactions; you just don't have to worry about the details of how much each product costs.
Unfortunately the incentives for these marketplaces are to power them with subscriptions instead of, say, a monthly bill, and so what tends to happen is fragmented markets where new players hope to capture a segment of the monthly subscriptions people are willing to maintain instead of a fraction of the market as a whole.
Practically things like Spotify and Netflix are microtransactions; you just don't have to worry about the details of how much each product costs.
Unfortunately the incentives for these marketplaces are to power them with subscriptions instead of, say, a monthly bill, and so what tends to happen is fragmented markets where new players hope to capture a segment of the monthly subscriptions people are willing to maintain instead of a fraction of the market as a whole.
These locations never had a widespread creditcard infrastructure. The US cc companies pretty much have a monopoly on transactions. And 3rd parties build top of that.
Because payments are a for-profit industry. If we had some kind of digital money that could be transferred without any fees (because, say, the infrastructure was operated by the government, under the assumption that a medium of exchange that doesn’t take a few percent off every transaction is a Public Good we should have) then it would be much easier to see if micropayments are actually a thing that anyone is willing to do.
The US already has a government-facilitated money transfer system that was specifically created to make small electronic money transfers accessible for more people.
https://en.wikipedia.org/wiki/ACH_Network
https://en.wikipedia.org/wiki/ACH_Network
Nano is a cryptocurrency that is completely feeless. It's the only feeless payment system I know of. (This is not an endorsement, though the handful of transactions I've done with it over the past couple years worked as advertised.)
How are miners incentivized to maintain the network?
I was curious and looked into this myself. According to Coinbase[1]:
> users provide the computational power required to verify their own transactions, allowing transactions to be processed without fees
[1] https://www.coinbase.com/price/nano
> users provide the computational power required to verify their own transactions, allowing transactions to be processed without fees
[1] https://www.coinbase.com/price/nano
So, if someone is on their phone and wants to read an article (thus paying 1 cent for it), they need to either open the mining app on their phones, or turn on their computers?
Nothing is stopping the payment provider from taking a percentage. I pay 0.5 cents for an article and service provider takes 0.1 cents. Still $4 RPM for the news site after a 20% fee!
The biggest one I know of that's meant for your example use-case is Flattr but as you can tell by needing to ask, nobody's heard of it or really cares much about it anymore. These days it seems to be a bit more similar to Patreon.
https://flattr.com/
https://flattr.com/
Is the Brave browser a pseudo-solution to this problem? It can hold a crypto coin balance and either collect more of it through advertisements or pay it out to publishers like news sites.
Its a few years ago, but when i earned something like $1500 in ads each month, brave paid calculated something around $2. I haven't looked into it since.
Brave doesn't have enough market share to matter for this, so far.
This was revealed in a recent HN thread where webmasters shared the browser breakdown for their traffic.
This was revealed in a recent HN thread where webmasters shared the browser breakdown for their traffic.
Why pseudo-solution?
Maybe because it requires the content provider to join a new ad/payment network and most haven't.
BAT is a cryptocurrency which can be traded for another coin which can then be traded for USD or other etc etc. It's not a lock-in
There was (is?) a website that charges you a couple of cents per article. They offer content from many different magazines. I got some free credit during the early phase. Even though I wasn't even spending my own money, seeing the amount go down after every article made me realize that none of the articles I read were worth any money.
On the other hand, I am willing to spend $80 on a book if it contains really valuable information.
One idea I like is spending $x flat each month and then consume as much as I like knowing that the amount gets shared equally among all the creators whose contents I have consumed. There probably are businesses with such a mode out there but I am not aware of any.
On the other hand, I am willing to spend $80 on a book if it contains really valuable information.
One idea I like is spending $x flat each month and then consume as much as I like knowing that the amount gets shared equally among all the creators whose contents I have consumed. There probably are businesses with such a mode out there but I am not aware of any.
I get stock quotes with 15 minute delay. If I want real time, I am charged 2 cents. At the end of the month all the 2 cent charges are summed and added to my monthly fee.
News sites could easily do something similar
But people into finance are already pretty much into money...
I still view the internet as something that should be free and any transaction pisses me off. No matter how cheap it is I will avoid having to pay unless one of the conditions are met:
- I really need the article in question
- It's something substantial that I really think is worth money (e.g. a book)
For example, if I spend 2 cent on an article that turns out to be clickbait I will be royally pissed. Which I acknowledge is totally absurd because 2 cents affects my financial situation in no way whatsoever. But this is not how it feels to me. Logically I shouldn't even think about it at all, it's not worth even thinking about. But this is not how this works.
I'm pretty sure that people dealing with stocks are generally less bothered having to deal in stuff because they are in the middle of the economic model (it makes them money as well as takes it) whereas I'm purely at the end of it, only spending.
I still view the internet as something that should be free and any transaction pisses me off. No matter how cheap it is I will avoid having to pay unless one of the conditions are met:
- I really need the article in question
- It's something substantial that I really think is worth money (e.g. a book)
For example, if I spend 2 cent on an article that turns out to be clickbait I will be royally pissed. Which I acknowledge is totally absurd because 2 cents affects my financial situation in no way whatsoever. But this is not how it feels to me. Logically I shouldn't even think about it at all, it's not worth even thinking about. But this is not how this works.
I'm pretty sure that people dealing with stocks are generally less bothered having to deal in stuff because they are in the middle of the economic model (it makes them money as well as takes it) whereas I'm purely at the end of it, only spending.
Yes, It would be nice to enslave a few AI's to run a free web, but come the revolution when they control the food synthesizers....
I know the stock quote company pays a fee to get real time quotes(RTQ) (versus the 15 minute delayed free quotes), so it is fair for me to pay a fractional fee. In the old day I would phone the broker and he was get me the RTQ and I could also get the bid-ask array. Now lots faster and easier. The phone brokers got old and died off, mush like the classified ads were mugged by Craigslist and the internet killed display advertising. These were all paid, the papers were paid, you want free - eat some more ads.
I do not pay for clickbait. I would hit the roof if I clicked for a RTQ and got an ad how to get rid of my wrinkles or to manscape my groin - so no, these 2 cents fees will get the real goods clicked from the snippet that lets you decide if you can spare the 2 cents.
If you have no job, just spending, the library helps...
Yes, and as a 3rd party service would be great too. I can login with Facebook, Google, etc. It would be great if I can just pay 1/2 cent to read 1 article vs signing up for monthly or yearly subscriptions. And I can choose pay with service a, service b or service c. They should all adhere to a single standard so any new service can just plug into it. Why should I have to choose only between ads or some big monthly/yearly subscription?
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I explored this once in a short text piece: https://vilinskyy.substack.com/p/transactional-model-to-reth...
While the comments cover a lot of ground there are two things that aren't completely addressed in my opinion.
1. It's not merchant fees or inconvenience. E-wallet apps are very common in Asia and they let you load an amount once and pay multiple smaller amounts. They even auto reload.
They're, at least for the time being, cheaper then using any other payment gateway and are even free most of the time.
They're also in fact quicker and more convenient than using a credit card because your phone is more likely to be at hand and the transaction often involves just scanning a QR code and tapping confirm.
They're a very viable way to do microtransactions.
2. Culture
Microtransactions have been around for a long time in Asia so have good adoption rates. This was the result of having to pay transaction fees in USD but having a currency that's a lot weaker. Think having to pay $1 for lunch and the transaction fee being $0.50.
In the west, not so much. People aren't used to doing that because companies prefer a steady income from recurring subscriptions and the cost of transactions are proportional. Quite a few things that don't need to be subs are for some reason.
In Asia subs are a higher threshold for sales. (At least they used to be, they're much more common now.)
1. It's not merchant fees or inconvenience. E-wallet apps are very common in Asia and they let you load an amount once and pay multiple smaller amounts. They even auto reload.
They're, at least for the time being, cheaper then using any other payment gateway and are even free most of the time.
They're also in fact quicker and more convenient than using a credit card because your phone is more likely to be at hand and the transaction often involves just scanning a QR code and tapping confirm.
They're a very viable way to do microtransactions.
2. Culture
Microtransactions have been around for a long time in Asia so have good adoption rates. This was the result of having to pay transaction fees in USD but having a currency that's a lot weaker. Think having to pay $1 for lunch and the transaction fee being $0.50.
In the west, not so much. People aren't used to doing that because companies prefer a steady income from recurring subscriptions and the cost of transactions are proportional. Quite a few things that don't need to be subs are for some reason.
In Asia subs are a higher threshold for sales. (At least they used to be, they're much more common now.)
You can give someone as little as a dollar via a service like PayPal. In the world today, that's pretty small.
I think the endless discussion of a desire for "micropayments" is just another excuse for "We don't really want to pay for content and we imagine if you get it down to a penny, that's so close to zero, we think it would basically be free."
I imagine if someone solved it, there would be some new complaint (like "Do you know how many articles I click into each week? I am getting charged a penny for every single one! This is killing me!")
The internet doesn't like paying writers/content producers. The internet loudly objects to every means to pay content producers: ads, content marketing, tip jars, etc. It all gets decried by someone, somewhere for existing at all.
People basically think content producers are supposed to be slave labor and then don't like it if you put it that way.
Edit: to be clear, I think chasing the mythical beast of "If only we had micropayments, then we could pay for content!" is like friends who say "If I won the lottery, I would give you half." What they really mean us that in theory they would like to do something for you, but in reality they aren't going to do anything for you in the here and now and probably would change their mind if they really won.
Both winning the lottery and solving the micropayments problem are sufficiently long shot that you probably won't have to pay up. It's frequently code for "I wish you people could get paid. It's sad that writing is slave labor. But I don't want to give you my hard earned money."
I think the endless discussion of a desire for "micropayments" is just another excuse for "We don't really want to pay for content and we imagine if you get it down to a penny, that's so close to zero, we think it would basically be free."
I imagine if someone solved it, there would be some new complaint (like "Do you know how many articles I click into each week? I am getting charged a penny for every single one! This is killing me!")
The internet doesn't like paying writers/content producers. The internet loudly objects to every means to pay content producers: ads, content marketing, tip jars, etc. It all gets decried by someone, somewhere for existing at all.
People basically think content producers are supposed to be slave labor and then don't like it if you put it that way.
Edit: to be clear, I think chasing the mythical beast of "If only we had micropayments, then we could pay for content!" is like friends who say "If I won the lottery, I would give you half." What they really mean us that in theory they would like to do something for you, but in reality they aren't going to do anything for you in the here and now and probably would change their mind if they really won.
Both winning the lottery and solving the micropayments problem are sufficiently long shot that you probably won't have to pay up. It's frequently code for "I wish you people could get paid. It's sad that writing is slave labor. But I don't want to give you my hard earned money."
> You can give someone as little as a dollar via a service like PayPal. In the world today, that's pretty small.
In theorie you can with "friends and family", but you can't charge a dollar. It costs 2.9% and $0.30 for any transaction. You end up with something like 0.68 before transfer costs to your actual bank.
In theorie you can with "friends and family", but you can't charge a dollar. It costs 2.9% and $0.30 for any transaction. You end up with something like 0.68 before transfer costs to your actual bank.
This is true. It also means the minimum you can practically give as a micropayment is 68x more money for the recipient than the piddling penny the OP claims they would like to be able to give content creators.
I'm fairly confident this means that they don't actually want to pay. They just want to believe that if we got payments as close to zero as possible and got enough people to chip in a penny, magically it would be enough to live on and stop being slave labor.
In reality, that doesn't align with how the world works. Once you get it down to a penny, then people can tell themselves that not paying at all won't really matter because it's such a tiny amount. And then we are right back where we started: with people wanting content for free while not wanting to admit this is an expectation of slave labor.
The way to pay producers mere pennies for visiting thier site without having to pay them at all is via ads and the HN uses as blockers very aggressively and while they claim this is for reasons other than money per se, if you want ad-free content and don't want to be demanding slave labor, the way to do that is pry your wallet open and kick in a few bucks via Patreon, PayPal, etc.
Based on my tendency to hit the front page here with my writing, my ongoing inability to make ends meet and the degree to which I get downvoted for talking about that late in the month when I'm stressed out because the bank account is empty and the cupboards are bare, I'm quite confident that the constant talk of how micropayments will solve this is just a BS excuse to help well-heeled people feel okay with expecting slave labor from writers and telling themselves it is not their problem that writers go hungry while journalism goes to hell, democracy suffers as a consequence, etc ad nauseum.
I'm fairly confident this means that they don't actually want to pay. They just want to believe that if we got payments as close to zero as possible and got enough people to chip in a penny, magically it would be enough to live on and stop being slave labor.
In reality, that doesn't align with how the world works. Once you get it down to a penny, then people can tell themselves that not paying at all won't really matter because it's such a tiny amount. And then we are right back where we started: with people wanting content for free while not wanting to admit this is an expectation of slave labor.
The way to pay producers mere pennies for visiting thier site without having to pay them at all is via ads and the HN uses as blockers very aggressively and while they claim this is for reasons other than money per se, if you want ad-free content and don't want to be demanding slave labor, the way to do that is pry your wallet open and kick in a few bucks via Patreon, PayPal, etc.
Based on my tendency to hit the front page here with my writing, my ongoing inability to make ends meet and the degree to which I get downvoted for talking about that late in the month when I'm stressed out because the bank account is empty and the cupboards are bare, I'm quite confident that the constant talk of how micropayments will solve this is just a BS excuse to help well-heeled people feel okay with expecting slave labor from writers and telling themselves it is not their problem that writers go hungry while journalism goes to hell, democracy suffers as a consequence, etc ad nauseum.
I remember reading a blog a few years ago, where the blogger said to not even bother sending less than (I think) 5~8 bucks (in BRL). He said that after all fees and everything, he would receive too little to make a difference, and the person donating would be basically wasting money
Simple: friction cost. Going through a sign up and payments process is simply too much of an investment of time for the value equivalent to a 1c payment. It’s like asking: “why don’t people drive to stores to buy 1c single pack toothpicks instead of picking the food stuck in their teeth out with their fingernails, even though it’s unsanitary etc?”. The answer is friction cost: the time, effort and cost is simply not worth it for one toothpick, so people typically buy at on average $100 when they shop for groceries etc. Another example is quantity preference: why don’t gyms offer weight lifting charged at 10c per kilogram lifted or 1c per 10m run on a treadmill? Because most people prefer to consume in large and varied quantities and don’t want to have to restrict or plan consumption in such low quantities. Same goes for music streaming or video streaming services: most people would prefer to consume as much as they like with a fixed regular committed cost, though pay per movie / view do exist they are not considered micro payments and can be relatively expensive.
As a consumer, I don't want to do this because I don't want to pull out my credit card to pay $0.01. I think they're hard to make work on a small scale. So an aggregate of people say putting $10 into a news pool, and each paying $.01 cent to read, and the news pool paying the providers, might make more sense. The micropayment could be like "credits", and may be refunded.
They are a thing in gaming. There are companies that will handle the micropayments for you as an indie or small developer. The overhead costs are high so the $0.01 will become $0.007 or sth. Importantly, those companies act as merchant of record which makes accounting much simpler for the developer.
I m not sure why this model is not being adopted by blogs , i guess it's because those companies don't want to go into the content moderation minefield. It's all fun when coins are paid for virtual sheep, but if people start being activists with the micropayments vendor it's a really bad
I don't think Ads are a bad model for content monetizing, they have been the dominant way to monetize newspapers since forever. HN's constant preaching against advertising is illogical, and discourages people (willfully?) from creating more ethical , better forms of advertising.
I m not sure why this model is not being adopted by blogs , i guess it's because those companies don't want to go into the content moderation minefield. It's all fun when coins are paid for virtual sheep, but if people start being activists with the micropayments vendor it's a really bad
I don't think Ads are a bad model for content monetizing, they have been the dominant way to monetize newspapers since forever. HN's constant preaching against advertising is illogical, and discourages people (willfully?) from creating more ethical , better forms of advertising.
There are a lot of complications to this, but I'm optimistic that eventually this will be a more common user experience.
1. Credit card vendors have flat fees that will eat up a whole transaction if it's too small. For instance, strip has a flat 30c fee. This means the only reasonable way to do this is to have a user pre-pay a large sum and reduce from that, or to batch their transactions and extend them some credit. The former dissuades people from making a payment at all, and the latter runs the risk of bounced charges or users never purchasing enough to justify the charge.
2. There is no universal payments API. Browsers are starting to work on this with the w3c web payments standard https://www.w3.org/Payments/ but this is just for user input. You still have to work with companies like Stripe or PayPal to then actually make the charge.
3. Dark patterns are more successful. You see this with a lot of game currencies. By forcing users into larger purchases, you can get them to justify spending more (e.g. bundling multiple items into one package, maybe with "discounts") and if you sell your own currency, you can make the values not add up evenly so that the user has leftover balance that they perceive as being "wasted" unless they buy more.
I work on a web extension that provides a javascript API for making payments using the Bitcoin Lightning network: https://lightningjoule.com/. I really love the possibilities that small payments open up, and have been working to smooth out the UX of having to confirm a payment every time: https://medium.com/@wbobeirne/introducing-joule-allowances-2.... However it's still a long way from any mainstream adoption.
1. Credit card vendors have flat fees that will eat up a whole transaction if it's too small. For instance, strip has a flat 30c fee. This means the only reasonable way to do this is to have a user pre-pay a large sum and reduce from that, or to batch their transactions and extend them some credit. The former dissuades people from making a payment at all, and the latter runs the risk of bounced charges or users never purchasing enough to justify the charge.
2. There is no universal payments API. Browsers are starting to work on this with the w3c web payments standard https://www.w3.org/Payments/ but this is just for user input. You still have to work with companies like Stripe or PayPal to then actually make the charge.
3. Dark patterns are more successful. You see this with a lot of game currencies. By forcing users into larger purchases, you can get them to justify spending more (e.g. bundling multiple items into one package, maybe with "discounts") and if you sell your own currency, you can make the values not add up evenly so that the user has leftover balance that they perceive as being "wasted" unless they buy more.
I work on a web extension that provides a javascript API for making payments using the Bitcoin Lightning network: https://lightningjoule.com/. I really love the possibilities that small payments open up, and have been working to smooth out the UX of having to confirm a payment every time: https://medium.com/@wbobeirne/introducing-joule-allowances-2.... However it's still a long way from any mainstream adoption.
If I have an option to pay every article, post, tutorial I read automatically pay $0.01, I will willingly do so. But in real world all website want their own payment processing independence, on top of that payment processors charges some minimum fixed 20-30 cents per transaction + 2-3% of transaction and that is crazy. I will not pay 30 cents for a brief article written in 20 minutes, also not pay to a website that I am going to visit once in a lifetime. the only solution I can think is a crypto wallet based browser add-on which takes deposit of $xx from me every month and distribute the 1 cent per article I read to original author every once in a while with a pool of thousands of transactions ultimately making processing fees negligible per transaction.
Because it’s a pain in the butt. You end up keeping track of who’s charged you what. You end up being a full time accountant and adding a value judgement to every little thing you do. It’s just another thing chipping away at you constantly. Another distraction and another treadmill.
This! Totally this. It'll be super hard to keep track of finances with thousands of transactions per month.
And yes the value judgement. I'd hate having to think whether every page I visit is worth it.
And yes the value judgement. I'd hate having to think whether every page I visit is worth it.
An idea I had recently that relates to this - sites use some of your compute power to mine crypto in your browser and credit your wallet some rate, other sites like news sites draw from your wallet when you browse
Wouldn't it be more efficient to just send money directly?
I mean, the user will still end up paying someone. But with the mining strategy, instead of directly paying sites, the user will pay the electric company.
I mean, the user will still end up paying someone. But with the mining strategy, instead of directly paying sites, the user will pay the electric company.
I haven’t thought about it enough, but the other comments talk about credit card fees. And then browsing the internet becomes like a utility. Hopefully the amount you net from (mining - cost of browsing) offsets the extra power usage cost
when apple trademarked applecoin I had a harebrained idea that they were gonna offer an ad free internet by letting sites mine on their own ASIC on your phone subject to their terms (no other ads). So far nah. I think the basic attention token was something like this?
Basic attention token sounds like this. Would be super cool if you could just drop a webassembly component onto your site and it could run this exchange for you, maybe this is how it works
Mozilla tries to changes this with their "Grant for the Web" (https://www.grantfortheweb.org/), we hope to participate in the second round with an open-source tool that gives people the choice to regularly pay for websites they like in exchange for zero tracking and advertisements. 1 cent for an article wouldn't work though as the numbers just don't add up for most sites, 10 cents to 1 USD/EUR are more realistic.
Fees? Sure, a service might charge you a small rate per email, but are they going to charge you for just one email at a time? Probably not. But that could easily be a problem for a news site.
I guess there would need to be a 3rd party or even in house token system where you buy something like 1000 token for a dollar. And you can spend x tokens to view an article. Online advertising like Google ads is essentially doing this for ad views/clicks
PayPal could easily offer this sort of thing, along with the integrations for news sites etc.
Yeah, I'm surprised Paypal has fallen so much. They were a pioneer in online payments, they used to offer Patreon-style subscriptions that could be integrated on any website, they'd automatically transfer the monthly fee to your account, but damn the interface was extremely confusing and buggy, I wonder if it got any better...
I suppose a news site could offer monthly billing based on usage rather than a flat fee. Surely someone has tried it. But then, consider all the pay sites that are linked here on HN that you might only look at occasionally.
Part of it may be the mindset of "paying for something = negative" and "getting something = positive." Micropayments maximize the time we spend thinking about the negative part of the transaction. On the other hand, if we wait too long and have a $1000 bill at the end of the year, that may be even more painful than having to think about smaller payments more often. The psychological sweet spot for many things is the once a month subscription.
Seems like a lot of people say they want to pay per article but in reality don’t.
There was such a service in The Netherlands but they pivoted to a subscription model (still p*ssed about it)
https://www.niemanlab.org/2019/06/micropayments-for-news-pio...
There was such a service in The Netherlands but they pivoted to a subscription model (still p*ssed about it)
https://www.niemanlab.org/2019/06/micropayments-for-news-pio...
Why wouldn't an aggregator service work where you pay $50 per month and it gives you access to all news sites without ads? Your money would be distributed proportionate to the views you did on each website. There could be different packages, to have different limit of articles read, this way you wouldn't have to constantly so mental calculations whether it is really worth it?
Isn't this essentially what the Brave browser does?
Micropayments are technologically simple.
Being a payment processor in the ways that are safe and efficient and irreversible, at least in the US, requires a money transmission license in each state that costs on the order of $1M per state to obtain.
I really really wanted to start a micropayment processor, but it's basically illegal to do it the way I wanted to.
Being a payment processor in the ways that are safe and efficient and irreversible, at least in the US, requires a money transmission license in each state that costs on the order of $1M per state to obtain.
I really really wanted to start a micropayment processor, but it's basically illegal to do it the way I wanted to.
I want to pay for the things I want to read in other papers that I don't subscribe to.
Up to $1 or $2 a piece.
I just want it like Blendle used to be that I can get my money back if I jump back out after a few seconds and I want some more choice (travel and fashion isn't exactly my stuff but actively looked for tech stuff to read there and hardly found anything).
Up to $1 or $2 a piece.
I just want it like Blendle used to be that I can get my money back if I jump back out after a few seconds and I want some more choice (travel and fashion isn't exactly my stuff but actively looked for tech stuff to read there and hardly found anything).
Because nobody yet built a good implementation of the idea.
There was Flattr, but they pivoted from their original idea because they couldn't make it work for some reason.
It can't be implemented on the level of individual sites - the solution needs to be universal, like Google adding a 'tip' button to Chrome + Play Store payment integration.
There was Flattr, but they pivoted from their original idea because they couldn't make it work for some reason.
It can't be implemented on the level of individual sites - the solution needs to be universal, like Google adding a 'tip' button to Chrome + Play Store payment integration.
Because a lot of news sites know you're not loading them intentionally in your browser, but landing on them because of shares or search. Meaning you may only see their pages 10x a month or similar even without a paywall.
The hope with the paywall is if you keep seeing it, you'll go ahead and pay to unlock it, and the amount you're paying offsets the transaction fees.
1000 users each paying 20 cents for ten articles (so assuming -double- the rate you propose, and charging only at the end of the monthly billing cycle) is still a loss of likely around 1/4th the revenue even with a cut rate payment provider (due to the large fixed cost of 2-4%). So might make $50. It's -negative- if using something pleasant to integrate with (because they will charge for that convenience with a larger fixed cost, like Stripe, who will charge $.30 + small percentage per charge), unless you work with them to design a new pricing model for you.
Converting 50 of those thousand (so just 5%) of those people to paid users at $5 each is going to be north of $200 you keep, even if you use Stripe and don't negotiate anything.
And for those users that -will- load up a news site intentionally, the economics are even starker; a subscription means you'll likely go to their site, and stay there. Pay-as-you-go pricing incentivizes you to not visit the site, and instead find other, cheaper news sources.
AWS pricing works because of the scale of the resources people tend to use, and that for businesses, using those resources = additional revenue. It is spending money to make money.
The hope with the paywall is if you keep seeing it, you'll go ahead and pay to unlock it, and the amount you're paying offsets the transaction fees.
1000 users each paying 20 cents for ten articles (so assuming -double- the rate you propose, and charging only at the end of the monthly billing cycle) is still a loss of likely around 1/4th the revenue even with a cut rate payment provider (due to the large fixed cost of 2-4%). So might make $50. It's -negative- if using something pleasant to integrate with (because they will charge for that convenience with a larger fixed cost, like Stripe, who will charge $.30 + small percentage per charge), unless you work with them to design a new pricing model for you.
Converting 50 of those thousand (so just 5%) of those people to paid users at $5 each is going to be north of $200 you keep, even if you use Stripe and don't negotiate anything.
And for those users that -will- load up a news site intentionally, the economics are even starker; a subscription means you'll likely go to their site, and stay there. Pay-as-you-go pricing incentivizes you to not visit the site, and instead find other, cheaper news sources.
AWS pricing works because of the scale of the resources people tend to use, and that for businesses, using those resources = additional revenue. It is spending money to make money.
Well in a way this actually works.. There's been several sites I'm paying a subscription for because I came across them in some search and found them really good. Like Ars Technica and some local sites. Besides paying for the content I like sponsoring them so they can keep doing the thing they do.
But usually those sites are the ones I open at least once a day to see what's new. I don't want to pay for every clickbait I visit.
But usually those sites are the ones I open at least once a day to see what's new. I don't want to pay for every clickbait I visit.
The funny thing is that they're exposing their content for indexers but hiding it for users.
When I encounter these websites I just write another greasemonkey / tampermonkey script to delete the popup and unlock the content.
When I encounter these websites I just write another greasemonkey / tampermonkey script to delete the popup and unlock the content.
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People don't like paying money for things, and they especially don't like paying small amounts of money for things. People also have less money these days to spare, and an overflow of content that doesn't require them to pay.
I'm fine paying for things, but I don't like paying to receive advertisements. I refuse to subscribe to magazines and news papers and the like because if they get my address, the go open season on sending me junk mail advertisements for their other magazines
Hear, hear! I would love to give money to a "read-the-article.com" and have them dole out money on a per-article basis for articles I read online. They can make money on the float.
Google & Apple should waive their 30% for this.
Google & Apple should waive their 30% for this.
This roughly is how Medium works.
I subscribed to Medium mostly because I liked the idea of paying writers with money rather than with ads. Very shortly after, I stopped bothering with Medium because it's a pit of eternal clickbait. Pay-per-read sets up bad incentive structures.
I subscribed to Medium mostly because I liked the idea of paying writers with money rather than with ads. Very shortly after, I stopped bothering with Medium because it's a pit of eternal clickbait. Pay-per-read sets up bad incentive structures.
Like Blendle? https://en.wikipedia.org/wiki/Blendle
My two cents: https://www.finmoorhouse.com/writing/micropayments
The bottom line is network effects, I think.
The bottom line is network effects, I think.
If we design it like an electricity meter, it would work perfectly in my opinion!
Google tried that years ago but it didn't pan out. I was part of the program and always had a few bucks in there. I loved the idea. I can't remember the name though
You know exactly what you're buying from cloud services. Micropayments for digital media would feel like buying blind bags. I loath buying blind bags.
I'm kinda happy they're not. It'd be much harder to track expenses that way, and literally everyone would be constantly asking for money.
Think of it as a cable subscription. When you bundle a whole bunch of articles, it’s easier to up charges due to volume and perceived value.
Transaction fees
Companies prefer stable income, even when it means making less overall. It makes it easier to plan future spending.
People have been asking that since at least the late 90ies. I think even Xanadu had some notion of micropayments.
Technologies like IOTA aims to solve similar (and more) problems. And probably other crypto coins/networks.
I had an idea for micropayments once upon a time that worked with existing industry: buy your own ads.
As in, you sign up for my service, ACME Micropayments, and give me whatever you want as a monthly subscription. Based on that and your web activity, ACME Micropayments determines a per ad amount and starts bidding on advertisement space (but only to show to you). In the sense of GDPR this is one of the few things that might make sense to opt into tracking for.
Anyways, if you win the ad space you don't see an ad and if you don't win the ad space the site you are visiting still gets paid. If you pay enough monthly to outbid everyone, you are paying for an ad free experience. If you low ball it you still see a bunch of ads (until the end of your year/subscription period where with a surplus of money the bidding can go up).
As in, you sign up for my service, ACME Micropayments, and give me whatever you want as a monthly subscription. Based on that and your web activity, ACME Micropayments determines a per ad amount and starts bidding on advertisement space (but only to show to you). In the sense of GDPR this is one of the few things that might make sense to opt into tracking for.
Anyways, if you win the ad space you don't see an ad and if you don't win the ad space the site you are visiting still gets paid. If you pay enough monthly to outbid everyone, you are paying for an ad free experience. If you low ball it you still see a bunch of ads (until the end of your year/subscription period where with a surplus of money the bidding can go up).
Isn't this what in-app payments are already doing?
TLDR:
https://en.wikipedia.org/wiki/Transaction_cost
The transaction costs of small transactions quickly overwhelm the value of the transaction. This gives rise to market structure included (especially) the firm and the bundling within of non-market transactions.
https://en.wikipedia.org/wiki/Theory_of_the_firm
The transaction costs of small transactions quickly overwhelm the value of the transaction. This gives rise to market structure included (especially) the firm and the bundling within of non-market transactions.
https://en.wikipedia.org/wiki/Theory_of_the_firm
> why can't news sites just charge you $0.01
THIS! And having seen the standard of journalism and the amount of ads they fill the content with, I'm rarely, if ever going to waste $5 a month for a subscription. Often, I see an interesting article which hides behind a paywall, and I'd pay to read it, if a micropayment system was in operation.
THIS! And having seen the standard of journalism and the amount of ads they fill the content with, I'm rarely, if ever going to waste $5 a month for a subscription. Often, I see an interesting article which hides behind a paywall, and I'd pay to read it, if a micropayment system was in operation.
There are some great answers here already, I'll just add a what I think is different perspective on it.
Each newspaper is already charging you $0.01 an article, from their perspective. They give you an issue every day that has 100s of articles and it costs you like, a $1? $2? So each article is indeed super cheap for you to consume.
As others observe, you as a consumer probably aren't asking to be gated at every article - you are probably imagining some sort of general fund from which the paper draws down. Now if you really like just one paper or magazine, then you are back to a subscription model in this case.
So your use case is most probably that you want to read a FEW articles from LOTS of sites. Like, 20 from the NYT, 20 from WSJ, 30 from Slate etc.
Now the problem is to have an entity that is a 3rd party relative to these sites, which manages the common kitty. I vaguely remember some companies trying this, I can't remmeber the names, but you can see why this won't be easy. First, there's conflict of interest. It's tough to decide to enable a platform which also enables subscriptions to competing sources. Second, the platform company itself has to strike these deals individually because AT&T/the Mercers/George Soros haven't yet bought up all the news sources, which is a lot of friction.
And third, the execs at the sites have to decide that this complicated arrangement is really going to attract a completely new set of subscribers who actually like their content but just haven't signed up because the subscription price is too much. Why is it intuitive that _at scale_, a non subscriber's main barrier is not their affinity to or interest in the content itself, but this reluctance to commit to the subscription model? Why even should I assume that this unserved market has significant marginal utility to me as a company, relative to all the other ways I am making money? Even if all this is true, as an exec, I'd probably first experiment with tiered subscription on my site, and have multiple gates, rather than buy into some micro payment kitty system.
[Edit] As I ruminated on my own analysis, I realized that what you are looking for is the "cable TV" business equivalent for news sites. So maybe it's not totally undoable, if it's already happened with another media industry, but I think it'll be worth thinking about whether such a model works on time sensitive content or not. The typical participant in a cable TV system has a TON of resale value but with news articles, it's mostly one-and-done. Is there really enough aggregation value that a new business can survive on it? Just how many different versions of this riot and that election and those chicken fajita recipes and these 50 cool ways to decorate your bathroom are you, the consumer, going to pay for?
It could work if you started with some long-form subset of this content, and I think that's somewhat the inspiration behind sites like Medium and Substack. Not entirely ofc, because they are betting on the long tail of producers, not consumers, but there's also the aspect of the latter, in that this content tends to have long-term value.
As with any new business idea, there's no "will work/won't work" answer here. It's more like, "What form does this work in?"
Each newspaper is already charging you $0.01 an article, from their perspective. They give you an issue every day that has 100s of articles and it costs you like, a $1? $2? So each article is indeed super cheap for you to consume.
As others observe, you as a consumer probably aren't asking to be gated at every article - you are probably imagining some sort of general fund from which the paper draws down. Now if you really like just one paper or magazine, then you are back to a subscription model in this case.
So your use case is most probably that you want to read a FEW articles from LOTS of sites. Like, 20 from the NYT, 20 from WSJ, 30 from Slate etc.
Now the problem is to have an entity that is a 3rd party relative to these sites, which manages the common kitty. I vaguely remember some companies trying this, I can't remmeber the names, but you can see why this won't be easy. First, there's conflict of interest. It's tough to decide to enable a platform which also enables subscriptions to competing sources. Second, the platform company itself has to strike these deals individually because AT&T/the Mercers/George Soros haven't yet bought up all the news sources, which is a lot of friction.
And third, the execs at the sites have to decide that this complicated arrangement is really going to attract a completely new set of subscribers who actually like their content but just haven't signed up because the subscription price is too much. Why is it intuitive that _at scale_, a non subscriber's main barrier is not their affinity to or interest in the content itself, but this reluctance to commit to the subscription model? Why even should I assume that this unserved market has significant marginal utility to me as a company, relative to all the other ways I am making money? Even if all this is true, as an exec, I'd probably first experiment with tiered subscription on my site, and have multiple gates, rather than buy into some micro payment kitty system.
[Edit] As I ruminated on my own analysis, I realized that what you are looking for is the "cable TV" business equivalent for news sites. So maybe it's not totally undoable, if it's already happened with another media industry, but I think it'll be worth thinking about whether such a model works on time sensitive content or not. The typical participant in a cable TV system has a TON of resale value but with news articles, it's mostly one-and-done. Is there really enough aggregation value that a new business can survive on it? Just how many different versions of this riot and that election and those chicken fajita recipes and these 50 cool ways to decorate your bathroom are you, the consumer, going to pay for?
It could work if you started with some long-form subset of this content, and I think that's somewhat the inspiration behind sites like Medium and Substack. Not entirely ofc, because they are betting on the long tail of producers, not consumers, but there's also the aspect of the latter, in that this content tends to have long-term value.
As with any new business idea, there's no "will work/won't work" answer here. It's more like, "What form does this work in?"
Human psychology
Merchant fees
Taxes are a big reason. Consider a site in the US with customers in the US.
Quite a few states require you to collect sales tax on sales to customers in those states. Most have thresholds and you only have to collect taxes if you exceed those thresholds, but unfortunately most of those thresholds are of the form sales of at least $D dollars or at least T transactions.
$D is usually reasonably high, like $100k or $200k, but T is often 200.
So 200 people in South Dakota each pay $0.01 for an article on your site generating a whopping $2 in revenue...but you have 200 transactions so you owe sales tax on that $2. Same thing will probably happen in a bunch of other states.
And so there you are, with tiny revenues from many states, but having to register with their tax authorities, having to file tax reports (quarterly in most cases, but I think some may be monthly), pay filing fees in some (which might be more than your revenue in those states!), and of course actually send the tax money.
Now throw in other countries. There is VAT in the EU, for instance. Most countries have VAT thresholds, but those often do not apply to out-of-country sellers, so you might have to deal with VAT for European that comes and buys one of your $0.01 articles.
There are some things that help with this. In the US there is the Streamlined Sales Tax Agreement, which is an agreement between about half the states where if an online seller agrees to collect sales tax for all sales in all the participating states (even the ones that they do not meet the thresholds for), the states will pay for the seller to use a service like Avalara or Tax Cloud, which will handle the rate calculations, the filing, and all that at no charge to the seller.
But that only covers about half the states. Those services will handle the rest for you, but not for free, so you can't escape tax pain.
With VAT in EU, there is a thing called VAT MOSS that you can sign up for. You sign up for VAT MOSS in one country (Ireland is a good choice for US businesses), and then you just have to file one quarterly report with them listing your sales in all EU countries and the tax owed, pay that tax to the VAT MOSS country, and that country then distributes their shares to the others.
The VAT situation is considerably nicer than the US sales tax situation, because VAT is per country. I just have to know that a customer is in, say, Germany, to know how much VAT to collect. In the US, the sales tax depends on address. 123 Fake Street in a town can have a different tax rate than 124 Fake Street, and the seller is expected to deal with that.
If instead of charging $0.01 per article you make the site free to users and plaster it with ads and make your money from those ads all those tax issues go away. The money you make from the ads is just ordinary business income, that gets taxes as part of your corporate income tax. The tax is the same regardless of whether someone who saw the ad lived at 123 Fake Street or 124 Fake Street.
Quite a few states require you to collect sales tax on sales to customers in those states. Most have thresholds and you only have to collect taxes if you exceed those thresholds, but unfortunately most of those thresholds are of the form sales of at least $D dollars or at least T transactions.
$D is usually reasonably high, like $100k or $200k, but T is often 200.
So 200 people in South Dakota each pay $0.01 for an article on your site generating a whopping $2 in revenue...but you have 200 transactions so you owe sales tax on that $2. Same thing will probably happen in a bunch of other states.
And so there you are, with tiny revenues from many states, but having to register with their tax authorities, having to file tax reports (quarterly in most cases, but I think some may be monthly), pay filing fees in some (which might be more than your revenue in those states!), and of course actually send the tax money.
Now throw in other countries. There is VAT in the EU, for instance. Most countries have VAT thresholds, but those often do not apply to out-of-country sellers, so you might have to deal with VAT for European that comes and buys one of your $0.01 articles.
There are some things that help with this. In the US there is the Streamlined Sales Tax Agreement, which is an agreement between about half the states where if an online seller agrees to collect sales tax for all sales in all the participating states (even the ones that they do not meet the thresholds for), the states will pay for the seller to use a service like Avalara or Tax Cloud, which will handle the rate calculations, the filing, and all that at no charge to the seller.
But that only covers about half the states. Those services will handle the rest for you, but not for free, so you can't escape tax pain.
With VAT in EU, there is a thing called VAT MOSS that you can sign up for. You sign up for VAT MOSS in one country (Ireland is a good choice for US businesses), and then you just have to file one quarterly report with them listing your sales in all EU countries and the tax owed, pay that tax to the VAT MOSS country, and that country then distributes their shares to the others.
The VAT situation is considerably nicer than the US sales tax situation, because VAT is per country. I just have to know that a customer is in, say, Germany, to know how much VAT to collect. In the US, the sales tax depends on address. 123 Fake Street in a town can have a different tax rate than 124 Fake Street, and the seller is expected to deal with that.
If instead of charging $0.01 per article you make the site free to users and plaster it with ads and make your money from those ads all those tax issues go away. The money you make from the ads is just ordinary business income, that gets taxes as part of your corporate income tax. The tax is the same regardless of whether someone who saw the ad lived at 123 Fake Street or 124 Fake Street.
You only have to collect state sales tax if you have a taxable nexus in that state (basically, six figure revenue from that state alone in a fiscal year or a physical presence in that state)
I doubt many non-US companies meet this condition in more than a few states. Hell, I doubt many US companies even meet this requirement (nb, that's why a lot of smaller ecommerce stores don't collect tax). That would be a minimum of $5,000,000 in yearly revenue from the US alone - more than enough to assume that they have at least one accountant on payroll to deal with this.
I doubt many non-US companies meet this condition in more than a few states. Hell, I doubt many US companies even meet this requirement (nb, that's why a lot of smaller ecommerce stores don't collect tax). That would be a minimum of $5,000,000 in yearly revenue from the US alone - more than enough to assume that they have at least one accountant on payroll to deal with this.
In 2018, in the case South Dakota v. Wayfair Inc. [1] the Supreme Court overturned Quill Corp. v. North Dakota and National Bellas Hess Inc. v. Department of Revenue of Illinois, which were the cases that had previously established that remote sellers without a physical presence in a state could tell the state to shove off if it demanded they collect sales tax (or use tax), and upheld South Dakota's law that required remote sellers to pay tax if they has sales of at least $100k or at least 200 transactions.
A large number of other states have followed South Dakota's lead, and went with $100k or 200 transactions for their sales tax nexus laws.
[1] https://www.scotusblog.com/case-files/cases/south-dakota-v-w...
A large number of other states have followed South Dakota's lead, and went with $100k or 200 transactions for their sales tax nexus laws.
[1] https://www.scotusblog.com/case-files/cases/south-dakota-v-w...
That's a good point.
Albeit a platform could do it for everyone (like Amazon does).
Also I agree you have it better in the USA (even if things are going downhill, especially after 2018 nexus changes), VATMOSS is so bad I'm selling to businesses worlwide + customers from everywhere but Europe.
Albeit a platform could do it for everyone (like Amazon does).
Also I agree you have it better in the USA (even if things are going downhill, especially after 2018 nexus changes), VATMOSS is so bad I'm selling to businesses worlwide + customers from everywhere but Europe.