Ask HN: Is there hope for micropayments?
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Back in the dark ages, I was an early employee of Bitpass, a micropayments startup, and for Bitpass I co-founded what may have been the first completely indie online music store, Mperia (in the sense that artists could simply upload and sell their work directly, with no contracts or middlemen). It used Bitpass micropayments for record sales.
(We may have also been the first online music store to have Creative Commons licensing built in, as our launch coincided with CC's. I'll never forget at their launch party, when the nice, awkward teenage kid I thought was just some attendee's son got up and was introduced as one of CC's developers, Aaron Swartz.)
The thing that killed the momentum then is the same thing that still kills it - card transaction fees. Bitpass got around this by allowing you to buy Bitpass credits for like $3, which you could spend anywhere. It worked great for music, and Mperia was originally seen as a good gateway (and, frankly, loss leader) for getting people to adopt our system.
Alas, it never took off, and Bitpass's brilliant CEO and founder got sidelined by investors in favor of some ronin CEO from the ad world who bogged it down in awkward partnership deal negotiations until the money ran out. I'm still convinced, all these years later, that if they'd focused on the indie media angle, it could have taken off.
(I also wish that this band who played their first gigs ever at my coffeeshop open mic in Vegas called The Killers had put their record up pre-record label deal, as I asked them to. I think Brandon was down but their shitty manager told them not to, and later they sued him for being shady af, which I did warn them about.)
(We may have also been the first online music store to have Creative Commons licensing built in, as our launch coincided with CC's. I'll never forget at their launch party, when the nice, awkward teenage kid I thought was just some attendee's son got up and was introduced as one of CC's developers, Aaron Swartz.)
The thing that killed the momentum then is the same thing that still kills it - card transaction fees. Bitpass got around this by allowing you to buy Bitpass credits for like $3, which you could spend anywhere. It worked great for music, and Mperia was originally seen as a good gateway (and, frankly, loss leader) for getting people to adopt our system.
Alas, it never took off, and Bitpass's brilliant CEO and founder got sidelined by investors in favor of some ronin CEO from the ad world who bogged it down in awkward partnership deal negotiations until the money ran out. I'm still convinced, all these years later, that if they'd focused on the indie media angle, it could have taken off.
(I also wish that this band who played their first gigs ever at my coffeeshop open mic in Vegas called The Killers had put their record up pre-record label deal, as I asked them to. I think Brandon was down but their shitty manager told them not to, and later they sued him for being shady af, which I did warn them about.)
This, by the way, was my first big burnout moment. You put your life into your startup and you truly believe this might make the world a better place, and then a bunch of MBA fucknuts come in and ruin it and you're left with useless stock options and a broken heart. Now I just want to get paid.
Never trust the suits, kids. Never trust their bullshit. And never give your heart to the business. It'll get broken every time.
Never trust the suits, kids. Never trust their bullshit. And never give your heart to the business. It'll get broken every time.
[deleted]
Unless you're the owner of it. Then its okay ;)
(But even then still never trust the suits)
(But even then still never trust the suits)
I think the generally good advice "never invest your own money" resonates fully with the notion of "never put your heart into it".
> The thing that killed the momentum then is the same thing that still kills it - card transaction fees.
Well, the US could follow Europe here if it wanted - in 2015 we've been capping CC fees at 0.3% and debit card fees at 0.2% and at the same time capped per-transaction fees at 5 cents [1], and whoops, suddenly the acceptance of cards in Germany exploded. I can pay the 50ct fee for loos on train stations or 1€ for a soda on a vending machine with cards.
The solution to micropayments are not shitcoins, the solution is to squeeze the rent seekers.
[1] https://www.consilium.europa.eu/en/press/press-releases/2015...
Well, the US could follow Europe here if it wanted - in 2015 we've been capping CC fees at 0.3% and debit card fees at 0.2% and at the same time capped per-transaction fees at 5 cents [1], and whoops, suddenly the acceptance of cards in Germany exploded. I can pay the 50ct fee for loos on train stations or 1€ for a soda on a vending machine with cards.
The solution to micropayments are not shitcoins, the solution is to squeeze the rent seekers.
[1] https://www.consilium.europa.eu/en/press/press-releases/2015...
As MinorTom pointed out, the final fee in the end still comes at a hefty percentage of the transfer.
> The solution to micropayments are not shitcoins, the solution is to squeeze the rent seekers.
First, "shitcoins" and blockchain-based tech for p2p payments are orthogonal points. You can have cheap transfers without requiring specific tokens.
Second, have you ever considered that the best way to squeeze the rent seekers is precisely be developing a technology that disrupts their business and forces them to lower their margins?
> The solution to micropayments are not shitcoins, the solution is to squeeze the rent seekers.
First, "shitcoins" and blockchain-based tech for p2p payments are orthogonal points. You can have cheap transfers without requiring specific tokens.
Second, have you ever considered that the best way to squeeze the rent seekers is precisely be developing a technology that disrupts their business and forces them to lower their margins?
For Americans, they love their loyalty points.
Somehow that has to get paid, and it’s via higher interchange rates.
Somehow that has to get paid, and it’s via higher interchange rates.
Youve sorta made the case FOR crypto, though, havent you? No need to squeeze anyone, just side step the old money.
Which crypto? Where?
Crypto is a multi billion dollar market, why hasn't a single solution for micropayments managed to achieve commercial uptake? Everyone would benefit if such a solution existed and was cheaper than Visa/MC.
Crypto having low transaction costs at anything resembling commercial scale TPS seems to be a myth. There's always some giant gaping caveat that goes unmentioned, like "lightning network Bitcoin" or "eth 2.0 with PoS will solve this".
Crypto is a multi billion dollar market, why hasn't a single solution for micropayments managed to achieve commercial uptake? Everyone would benefit if such a solution existed and was cheaper than Visa/MC.
Crypto having low transaction costs at anything resembling commercial scale TPS seems to be a myth. There's always some giant gaping caveat that goes unmentioned, like "lightning network Bitcoin" or "eth 2.0 with PoS will solve this".
I havent looked, I have no horse in this race. Just parent poster made a strong case to avoid the current banking systems since requiring legislation to keep them in check is a hilarious pipe dream. If crypto can do that, well, there's your use case.
Paypal still charges a 7-fold of that in Europe. Is the european regulation not binding? Or is Paypal somehow evading compliance as they are an 'online' creditcard provider?
In addition to mschuster91's point, you should know that the cap only applies to four party scheme card transaction interchange, not to scheme fees nor to your acquirer's fees. In reality you will pay somewhere between 0.9% and 2% for your transactions, whereas local schemes can be as cheap as 0.2% or even pennies.
Compared to the US's 1.15%~2.7% +10ct interchange (not including other fees!) it's still quite cheap.
Compared to the US's 1.15%~2.7% +10ct interchange (not including other fees!) it's still quite cheap.
Add on top the "cashback" and "reward" schemes that many American CCs offer. These are paid for by the vendor.
They charge a flat 1.75% of total processing amounts per day. They don't charge a rent on top.
https://www.zettle.com/gb/pricing
https://www.zettle.com/gb/pricing
PayPal is not a credit card provider, they are a weird hybrid of a bank and a payment gateway and as such not covered by the regulations on interchange fees.
> The thing that killed the momentum then is the same thing that still kills it - card transaction fees.
If only there were some permissionless internet payments system that has near-zero fees and realtime settlement that works across borders and has frictionless setup.
The real problem is not the market or the technology, it's that the state wishes to surveil and ultimately exercise veto over all payments in society. Lightning payments solve this perfectly and could across the whole web but it's illegal in the US to "transmit money" without doing all sorts of market-killing, expensive customer intrusion and surveillance (and buying expensive licenses in every state).
There's nothing technically stopping a browser extension from letting you anonymously pay a penny per request or something in one click to pass a paywall. It's just the state's incessant hunger to want 100% transaction surveillance and veto.
If only there were some permissionless internet payments system that has near-zero fees and realtime settlement that works across borders and has frictionless setup.
The real problem is not the market or the technology, it's that the state wishes to surveil and ultimately exercise veto over all payments in society. Lightning payments solve this perfectly and could across the whole web but it's illegal in the US to "transmit money" without doing all sorts of market-killing, expensive customer intrusion and surveillance (and buying expensive licenses in every state).
There's nothing technically stopping a browser extension from letting you anonymously pay a penny per request or something in one click to pass a paywall. It's just the state's incessant hunger to want 100% transaction surveillance and veto.
> near-zero fees and realtime settlement
Yeah, I'm pretty sure that's not a thing. Bitcoin transactions can easily cost tens of dollars each, and Lightning balances are ultimately settled via Bitcoin.
Yeah, I'm pretty sure that's not a thing. Bitcoin transactions can easily cost tens of dollars each, and Lightning balances are ultimately settled via Bitcoin.
My guess is you haven’t used bitcoin a while. You could easily get away with paying 1sat/vbyte (< $1 for a typical transaction) for over 2 years now.
While the 2nd part of your statement is on the surface true, it misses the point. You can gets hundreds of thousands of transactions out of a channel without ever closing it. Batching on-chain transactions is now easier than ever so you can close and rebalance hundreds of channels cheaply. You can very easily do automatic swaps between onchain and lightning channel balances. You can be the counter party to either side of these transactions depending on if you need inbound or outbound channel liquidity. These transactions can also be easily batched allowing you to unlock liquidity where you need it for a fraction of the price of a single spend bitcoin transaction.
There is still a long way to go to scale bitcoin to billions of users while keeping the blockchain accessible to all.
For further interesting scaling solutions in the works checkout.
- cross input signature aggregation: A way to super charge batching. - channel factories: a way for a lightning channel to be trustlessly owned by multiple parties. - MuSig: multisig that is indistinguishable from a single signer transaction. - federated chaumian mints: a way to do privacy preserving custodial wallets. - drive chains/space chains: a bitcoin merged mined side chain. - eltoo: new lightning channel upgrade that cuts the space complexity of channels from O(n) to O(1). - covenants congestion control: allows a sender to commit to spend while the receiver gets to choose when to receiver. Exchange withdrawals during high demand times while a customer can wait for a lower demand time to fully receive the coins.
Happy to answer any questions on these.
While the 2nd part of your statement is on the surface true, it misses the point. You can gets hundreds of thousands of transactions out of a channel without ever closing it. Batching on-chain transactions is now easier than ever so you can close and rebalance hundreds of channels cheaply. You can very easily do automatic swaps between onchain and lightning channel balances. You can be the counter party to either side of these transactions depending on if you need inbound or outbound channel liquidity. These transactions can also be easily batched allowing you to unlock liquidity where you need it for a fraction of the price of a single spend bitcoin transaction.
There is still a long way to go to scale bitcoin to billions of users while keeping the blockchain accessible to all.
For further interesting scaling solutions in the works checkout.
- cross input signature aggregation: A way to super charge batching. - channel factories: a way for a lightning channel to be trustlessly owned by multiple parties. - MuSig: multisig that is indistinguishable from a single signer transaction. - federated chaumian mints: a way to do privacy preserving custodial wallets. - drive chains/space chains: a bitcoin merged mined side chain. - eltoo: new lightning channel upgrade that cuts the space complexity of channels from O(n) to O(1). - covenants congestion control: allows a sender to commit to spend while the receiver gets to choose when to receiver. Exchange withdrawals during high demand times while a customer can wait for a lower demand time to fully receive the coins.
Happy to answer any questions on these.
You're incorrect. This is the reason Lightning exists and the problem it solves.
Payment channels are a little complex so it's common for people to not understand them, but they do indeed solve this problem completely.
Payment channels are a little complex so it's common for people to not understand them, but they do indeed solve this problem completely.
There are plenty of alternatives outside of BTC but lightning works.
In EU there are also free and instant bank transfers.
CC payments can be reversed though (which is a cons in my mind, I don't understand why merchants should lose the money by default in case of a dispute).
In EU there are also free and instant bank transfers.
CC payments can be reversed though (which is a cons in my mind, I don't understand why merchants should lose the money by default in case of a dispute).
Because the impact that a fraudulent seller has on an individual is generally going to be much higher than the impact a fraudulent buyer has on an entire business.
Sellers can price in and insure themselves against fraud. The protections offered by CCs are that insurance for consumers.
Sellers can price in and insure themselves against fraud. The protections offered by CCs are that insurance for consumers.
Solana transactions cost thousands of a cent and settle in 30ms.
Which, incidentally, is why it's the blockchain with the second highest number of users. Basically free and instant transactions enables seamless integration with the web.
Which, incidentally, is why it's the blockchain with the second highest number of users. Basically free and instant transactions enables seamless integration with the web.
If it goes down for hours every month, it is not a blockchain.
Last I looked, you can't run a solana p2p node behind NAT. Instant showstopper for me.
> If only there were some permissionless internet payments
Card fees are consequences of their pricing decisions, not marginal cost of transactions. And, the reason they have "pricing power" is the size/market position of their networks.
> browser extension from letting you anonymously pay a penny per request
Of course, and there is no need for crypto currencies. Paypal could have implemented this for twenty years.
Card fees are consequences of their pricing decisions, not marginal cost of transactions. And, the reason they have "pricing power" is the size/market position of their networks.
> browser extension from letting you anonymously pay a penny per request
Of course, and there is no need for crypto currencies. Paypal could have implemented this for twenty years.
I'm not sure how you would go about being anonymous if you already gave them all of your bank info and IDs.
Monero is the only payment method I would consider to be most likely anonymous. It has very low transaction fees (<0.001%) and completes a translaction in about 20 minutes.
Monero is the only payment method I would consider to be most likely anonymous. It has very low transaction fees (<0.001%) and completes a translaction in about 20 minutes.
> The real problem is not the market or the technology, it's that the state wishes to surveil and ultimately exercise veto over all payments in society.
With anything cryptocoin, everyone on the planet can now analyze where my money flows to and from. That's decidedly worse than governments which need court orders to do so.
With anything cryptocoin, everyone on the planet can now analyze where my money flows to and from. That's decidedly worse than governments which need court orders to do so.
> With anything cryptocoin everyone on the planet can now analyze where my money flows to and from
I don't believe this is correct for Monero, ZCash, and anything based on mimblewimble (BEAM, Grin).
I don't believe this is correct for Monero, ZCash, and anything based on mimblewimble (BEAM, Grin).
The DHS has been able to track Monero since at least 2020 [1]. Basically, as long as you have an in and a likely out, governments can do statistic analysis to determine payment flows.
[1] https://de.cointelegraph.com/news/privacy-coins-no-more-ciph...
[1] https://de.cointelegraph.com/news/privacy-coins-no-more-ciph...
This is a corporate piece essentially informed by the company itself outlining they can do so. Who knows if it is true? The fact of the matter is if your argument is going to be "Yeah, I'm pretty sure this is it" (which is what you are proposing), that is not proof. It's a strong hunch.
I don't want to be that guy... but I'm going to be that guy.
Check out nano: https://en.wikipedia.org/wiki/Nano_(cryptocurrency)
Granted it is a cryptocurrency, but it is feeless and ~1 second confirmation.
I too thought it sounded like magic when I first heard of it.
Also, the browser extension you wish for exists, it's called Coil: https://coil.com/ but it simply doesn't have enough buy-in to work. The real problem with microtransactions has nothing to do about some bigwig execs or some deep state preventing it crap, it's simply that EVERYONE has to buy into it for it to work properly.
Check out nano: https://en.wikipedia.org/wiki/Nano_(cryptocurrency)
Granted it is a cryptocurrency, but it is feeless and ~1 second confirmation.
I too thought it sounded like magic when I first heard of it.
Also, the browser extension you wish for exists, it's called Coil: https://coil.com/ but it simply doesn't have enough buy-in to work. The real problem with microtransactions has nothing to do about some bigwig execs or some deep state preventing it crap, it's simply that EVERYONE has to buy into it for it to work properly.
What's to stop a sybil spam attack?
I highly recommend you go watch Rick Falkvinge's videos on Lightning Network. They are a little old, but everything in them stands true to this day.
I'd rather a link to a commercially available software that does this. If I'm a business considering alternative payment methods, I need a vendor's quote, not a lecture about how transaction settlement works.
When it's not being spammed into a standstill, Solana is a potential candidate that could facilitate micropayments in a trustless fashion. I'm not completely sure but the new Solana Pay might be a step in that direction
This is very interesting, thanks for sharing. We adopted a credit model for our API platform and it's akin to this. I with we were able to do Pay with X as part of that but payments in general are a huge undertaking that requires a lot of upfront network effects. Hence social networks do it really well. Would be interesting to do something Dev centric.
This sounds similar to eMusic which I had back in the 2000's before they sold out to Sony.
It was amazing all the indie music I was able to purchase, load up the wallet and spend micro amounts per song.
I think the situation may have improved, with some card processors like Zettle who only take a flat 1.75% of your total daily taking, which makes it a bit easier to do many small transactions.
It was amazing all the indie music I was able to purchase, load up the wallet and spend micro amounts per song.
I think the situation may have improved, with some card processors like Zettle who only take a flat 1.75% of your total daily taking, which makes it a bit easier to do many small transactions.
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>, I've found myself paying for OpenAI's GPT-3 playground app in micropayments format.
Unless I'm misunderstanding OpenAI's pricing format for "bulk tokens" [1] prepaid for by credit-cards, this isn't web micropayments in the way many others think of that term. Likewise, buying audiobooks via Audible Credits by prepaying $229.50 to get 24 credits isn't really micropayments.
Some were hoping for internet micropayments at the granularity of transactions rather than pre-paying a large upfront amount to be parceled out in smaller amounts later. What prevents micropayments at the fine granularity is the high VISA/Mastercard credit-card transaction fees.
E.g. many want to micropay 2 cents for a news article without prepaying $10/month or $120/year to a "media aggregator" taking a percentage cut of that.
[1] https://openai.com/api/pricing/
Unless I'm misunderstanding OpenAI's pricing format for "bulk tokens" [1] prepaid for by credit-cards, this isn't web micropayments in the way many others think of that term. Likewise, buying audiobooks via Audible Credits by prepaying $229.50 to get 24 credits isn't really micropayments.
Some were hoping for internet micropayments at the granularity of transactions rather than pre-paying a large upfront amount to be parceled out in smaller amounts later. What prevents micropayments at the fine granularity is the high VISA/Mastercard credit-card transaction fees.
E.g. many want to micropay 2 cents for a news article without prepaying $10/month or $120/year to a "media aggregator" taking a percentage cut of that.
[1] https://openai.com/api/pricing/
Another thing that puts a damper on them is taxes.
Let's say my site lets people purchase news articles for 1 cent. I get 4 readers in Chicago who each purchase 1 article per week. That's 208 transactions for a total of $2.08.
That's over the threshold in Chicago's state, Illinois, for creating an "economic nexus". Their threshold is $100k sales per year or 200 transactions per year. So now I've got to register with Illinois and do regular tax filing. I may also have to collect more data than I want on my readers there, such as address information, to figure out the right rate (rates vary by location within most states).
23 other states also have that annoying "or 200 transactions" condition on their economic nexus laws.
Compare this to if I instead only offer my news articles through an aggregator. Now when those 4 readers in Chicago buy my articles they are doing business with the aggregator. I don't have to deal with any Illinois taxes. Or any of those other 23 states' taxes.
That's the aggregator's problem. That's fine because the aggregator presumably has not just my 4 readers in Illinois but also plenty of readers of the other content they aggregate, making their business in the state large enough that the costs of dealing with taxes are comparatively small.
Let's say my site lets people purchase news articles for 1 cent. I get 4 readers in Chicago who each purchase 1 article per week. That's 208 transactions for a total of $2.08.
That's over the threshold in Chicago's state, Illinois, for creating an "economic nexus". Their threshold is $100k sales per year or 200 transactions per year. So now I've got to register with Illinois and do regular tax filing. I may also have to collect more data than I want on my readers there, such as address information, to figure out the right rate (rates vary by location within most states).
23 other states also have that annoying "or 200 transactions" condition on their economic nexus laws.
Compare this to if I instead only offer my news articles through an aggregator. Now when those 4 readers in Chicago buy my articles they are doing business with the aggregator. I don't have to deal with any Illinois taxes. Or any of those other 23 states' taxes.
That's the aggregator's problem. That's fine because the aggregator presumably has not just my 4 readers in Illinois but also plenty of readers of the other content they aggregate, making their business in the state large enough that the costs of dealing with taxes are comparatively small.
The US really needs to setup nationwide tax infrastructure such that commerce is not stymied by the compliance burdens, or legal risks of making a mistake.
As a seller, there should be a government website with an API that I can hook into where it calculates all applicable taxes and does all that nonsense and all I need to worry about is providing the product or service.
As a seller, there should be a government website with an API that I can hook into where it calculates all applicable taxes and does all that nonsense and all I need to worry about is providing the product or service.
Presumably even if such a system existed (there are private systems like Sabrix that do the hard parts of this), you’d need to give the system information that you might not currently have for a web visitor (like the physical address of the visitor).
Sure, but the government can make it so the seller does not see that information. Or the government can make it so taxes are not based on your address.
I'm not sure I see a practical path to the latter, at least at the granularity of "what state are you in?" and in the context of "at least one state wants to tax such transactions".
It would probably be within the Federal government's power to prohibit states from requiring online/mail-order/phone sellers from outside the state to collect the state's sales or use tax unless that state participates in some specified system to simplify that.
Such simplification might include a single rate per state and a way to do a single filing that covers all states one sold items into.
I.e., something similar to how the EU handles VAT. Here's how we as a US company handle VAT in EU countries. First, we registered with the tax authorities in a single EU country. We are using Ireland. This took something like 20 minutes to figure out and was all online.
Then, once a quarter we upload a file to the that country's tax office that simply lists for each EU country how much we sold, what VAT rate we used, and how much VAT we collected, and we give Ireland all the collected VAT. This only takes a few minutes I believe.
Ireland then deals with sending each of the other EU countries their share of the VAT we collected.
There is an ongoing effort to do something like that in the US with the Streamlined Sales Tax (SST) project. Almost half the states have joined that. The deal there is that if a seller agrees to collect tax for all the SST states then those states will pay the costs for the merchant to use some third party tax service, such as Avalara, for this.
That's nice, but does not include any rate simplification. With simple rates, like in the EU, I don't need to hook my cart up to any external tax APIs. I just need an internal table of the per country rate. I use an external API to keep up to date when a country changes their rate (which isn't very often), but that can be a daily cron job rather than something in the live cart path. With the bazillion rates per state model of the US you have to hook your cart up to a third party tax API.
SST also doesn't help with the states that aren't part of SST. Of course the third party tax services such as Avalara are happy to handle those for you too, but not for free like they do with the SST states.
An EU style system with both simple rates and a being able to deal with all states through one free service is probably too much to hope for. But maybe Congress requiring states to join SST if they want to force out of state sellers to collect would be achievable, and that would be way better than the current mess.
Such simplification might include a single rate per state and a way to do a single filing that covers all states one sold items into.
I.e., something similar to how the EU handles VAT. Here's how we as a US company handle VAT in EU countries. First, we registered with the tax authorities in a single EU country. We are using Ireland. This took something like 20 minutes to figure out and was all online.
Then, once a quarter we upload a file to the that country's tax office that simply lists for each EU country how much we sold, what VAT rate we used, and how much VAT we collected, and we give Ireland all the collected VAT. This only takes a few minutes I believe.
Ireland then deals with sending each of the other EU countries their share of the VAT we collected.
There is an ongoing effort to do something like that in the US with the Streamlined Sales Tax (SST) project. Almost half the states have joined that. The deal there is that if a seller agrees to collect tax for all the SST states then those states will pay the costs for the merchant to use some third party tax service, such as Avalara, for this.
That's nice, but does not include any rate simplification. With simple rates, like in the EU, I don't need to hook my cart up to any external tax APIs. I just need an internal table of the per country rate. I use an external API to keep up to date when a country changes their rate (which isn't very often), but that can be a daily cron job rather than something in the live cart path. With the bazillion rates per state model of the US you have to hook your cart up to a third party tax API.
SST also doesn't help with the states that aren't part of SST. Of course the third party tax services such as Avalara are happy to handle those for you too, but not for free like they do with the SST states.
An EU style system with both simple rates and a being able to deal with all states through one free service is probably too much to hope for. But maybe Congress requiring states to join SST if they want to force out of state sellers to collect would be achievable, and that would be way better than the current mess.
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Just regarding OpenAI's pricing, the usage is paid for at the end of the month (Stripe's pricing would indeed make it unfeasible to charge for each cent individually, hence they bulk-charge at the end of the month).
I could imagine The Economist charging me at the end of the month for the 20 articles * 10 cent I consumed.
I could imagine The Economist charging me at the end of the month for the 20 articles * 10 cent I consumed.
Sure, but that’s just a credit billing system then. Still not micro transactions.
Transferring the $1 vs $1000 digitally, have no technical difference and hence the commission based payment cut is something that I have a hard time to accept.
Btw I am from India. Earlier,every time I see people swipe the cards in the retail stores, I felt sorry for the shopkeepers as they had to bear the 1.5%-2% as transaction charges of the total amount paid.
It all changed after the launch of UPI payment system, now I can just pay 5-10 INR(7 cents to 13 cents) to a shopkeeper without feeling the guilt of payment charges. It has been more than two years when I used my last VISA card payment transaction for any retail shopping. I think other countries should also develop such not-for-profit payment network system that can be used to pay efficiently digitally without making any side the victim.
Btw I am from India. Earlier,every time I see people swipe the cards in the retail stores, I felt sorry for the shopkeepers as they had to bear the 1.5%-2% as transaction charges of the total amount paid.
It all changed after the launch of UPI payment system, now I can just pay 5-10 INR(7 cents to 13 cents) to a shopkeeper without feeling the guilt of payment charges. It has been more than two years when I used my last VISA card payment transaction for any retail shopping. I think other countries should also develop such not-for-profit payment network system that can be used to pay efficiently digitally without making any side the victim.
Brazil's Pix[1] completely transformed the way we deal with payments day-to-day. It's available 24/7, free of fees and has really good UX. Many small merchants are giving up on credit card and accepting only Pix. And the Central Bank of Brazil keeps pushing Pix's capabilities forward. Last year they launched two features that can be translated something like Pix Withdrawals and Pix Change (Pix Saque and Pix Troco in Portugues). The two features work similarly. Essentially they turn every commercial site into an ATM. You make a Pix to, say, a supermarket and get that money in cash. Or, in the case of Pix Change, you'd pay in Pix more than the total value of the purchase and receive the change in cash.
Pix is not even 2 years old and it's already changed the way people deal with money. It's incredibly reliable and astonishingly fast.
Who would say that the biggest Brazilian fintech revolution of all times would come from the Central Bank?
[1]: https://en.wikipedia.org/wiki/Pix_(electronic_payment_system...
Pix is not even 2 years old and it's already changed the way people deal with money. It's incredibly reliable and astonishingly fast.
Who would say that the biggest Brazilian fintech revolution of all times would come from the Central Bank?
[1]: https://en.wikipedia.org/wiki/Pix_(electronic_payment_system...
Also, Marc Rubinstein covered Pix in his newsletter some time ago https://www.netinterest.co/p/paying-faster-99d.
I'm a brazilian living in Brazil and I can't overstate how much of a game changer Pix is. The Brazilian Central Bank did an outstanding job.
Instant transactions, zero fees, available to anyone with a bank account.
Instant transactions, zero fees, available to anyone with a bank account.
(Your link is missing the final closing parenthesis.)
Sounds similar to what I used in New Zealand quite a few years ago. However their system wasn't confined to mobile apps. Is pix mobile only?
Also in that system payments reconciled that evening, it wasn't instantaneous. To be honest I preferred that. I was able to fix a payment with a mistake before it went out.
Sounds similar to what I used in New Zealand quite a few years ago. However their system wasn't confined to mobile apps. Is pix mobile only?
Also in that system payments reconciled that evening, it wasn't instantaneous. To be honest I preferred that. I was able to fix a payment with a mistake before it went out.
Is Pix a public version of Venmo?
Seems like some of the Pix => cash features are different.
Seems like some of the Pix => cash features are different.
Now we just have to integrate it with other countries.
> I felt sorry for the shopkeepers as they had to bear the 1.5%-2% as transaction charges of the total amount paid
I used to feel that way. Then I discovered how much time/effort is spent counting cash. Credit cards are all electronic and so the money goes directly into your bank accounts without needing to count and recount all that cash. Companies are money ahead vs cash once they account for all the labor cash costs. That is before we get into all the costs of theft that you avoid.
The above assumes a straight 2% transaction fee. If you are paying $.25/transaction then for small purchases the transaction costs are way too high.
I used to feel that way. Then I discovered how much time/effort is spent counting cash. Credit cards are all electronic and so the money goes directly into your bank accounts without needing to count and recount all that cash. Companies are money ahead vs cash once they account for all the labor cash costs. That is before we get into all the costs of theft that you avoid.
The above assumes a straight 2% transaction fee. If you are paying $.25/transaction then for small purchases the transaction costs are way too high.
The transaction fees are flat 1.5%-2% for regular credit cards(may climb upto 4% for reward or amex type of premium offerings). The retail grocery business has gross margin of 8-10% which ultimately settles to net profit of 4%-5%. and paying almost half of your net profit for transaction fees is insane.
In any case, the government owned non-profit digital payment system is really a great idea. People tend to have increased digital transaction which were unaccounted in the past, which also gives the correct data to government regarding current country financial habits.
Personally, I'd prefer to just pay tiny constant monthly fees for things, than to have the mental overhead of knowing there is a nonzero cost for every search I do.
I am prone to microoptimizing things, and I would absolutely spend an objectively excessive amount of time and mental energy trying to avoid doing another search to save three cents.
I am prone to microoptimizing things, and I would absolutely spend an objectively excessive amount of time and mental energy trying to avoid doing another search to save three cents.
I have the same issue. If I'm paying 0.005$ for every search, I would stop searching because of the mental effort to optimize everything.
One alternative that could work, is to make a subscription service, and then reimburse the unused amount.
Like make people pay 20$/month, then do your micropayment system in the background, by the end of the month, refund them to difference if they didn't exceed that monthly value.
It creates a positive feeling instead of a constant background stress with every interaction.
One alternative that could work, is to make a subscription service, and then reimburse the unused amount.
Like make people pay 20$/month, then do your micropayment system in the background, by the end of the month, refund them to difference if they didn't exceed that monthly value.
It creates a positive feeling instead of a constant background stress with every interaction.
Interesting to hear about how micro-payments would make you two feel.
This is indeed the theoretical expectation I had regarding micro-payments, but I was positively surprised to find out that I didn't care at all and in the end, I'm always positively surprised by the GPT-3 bill (I got much more value out of it than they charged me).
This is indeed the theoretical expectation I had regarding micro-payments, but I was positively surprised to find out that I didn't care at all and in the end, I'm always positively surprised by the GPT-3 bill (I got much more value out of it than they charged me).
This does seem very likely to vary by person. I'm very much saying this from the perspective of "for my own sake, I hope this doesn't become the standard", rather than "this will never happen because everyone's brain is like my brain". I've made my share of blatantly wrong predictions based on the latter :)
If the level of a bill surprises you, you are financially irresponsible. That just doesn't gel with an adult beyond a certain age (barring some outliers), which is probably what you are seeing above.
I mentioned the same for me during the kagi search engine pricing discussions. Slight overpaying is fine, but paying per search would instantly create an illogical chilling effect for me.
Totally agree - I think the main issue with Kagi is that although they have clearly built out the service and are offering it for free at the moment, their premise that people will actually micropay for a search hasn't been tested yet.
It's easy to get users if you offer a paid service for free, but much more difficult to get people to pay for it.
(They have done surveys where people have said they would pay, but this is different to actually putting their credit card in and putting their money where their mouths are!)
It's easy to get users if you offer a paid service for free, but much more difficult to get people to pay for it.
(They have done surveys where people have said they would pay, but this is different to actually putting their credit card in and putting their money where their mouths are!)
To be fair, me and a bunch of other people are wondering why we still can’t pay ;) I’m perfectly happy with it and what I’d get for my $10-$20.
Hehe, I don't doubt that you will pay :)
I just also think there will be a non-zero proportion of people who absolutely promise and intend to pay, then won't put their credit card details in.
I also think there is a non-zero proportion of people who will search differently/less when every search costs them money!
I just also think there will be a non-zero proportion of people who absolutely promise and intend to pay, then won't put their credit card details in.
I also think there is a non-zero proportion of people who will search differently/less when every search costs them money!
I'm getting tired of all these monthly subscriptions that cost me $7-20 no matter of usage. Premium podcasts feet's, video streaming, Spotify. It's becoming a very real cost and mentally I'm bucketing it all together. Are others not getting subscription fatigue?
Edit: similarity, when I'm building a side project now O avoid everything with a fixed cost as much as possible. $5/month for a relational DB? nope, let's see how I can store data and only pay for storage and access.
Edit: similarity, when I'm building a side project now O avoid everything with a fixed cost as much as possible. $5/month for a relational DB? nope, let's see how I can store data and only pay for storage and access.
Your other option for Kagi will be to pay-per-use (with pre-paid credits).
I don’t have that many subscriptions, so I’m not getting any fatigue ;)
I don’t have that many subscriptions, so I’m not getting any fatigue ;)
I hope they don't listen to you, because paying per use is the best option and you can just get over it.
If they have a monthly fee I'll hesitate since if I reduce my usage for a unspecified while I'll never know if I should cancel it or not. It requires being able to predict the future, which is a cognitive cost I can't overcome.
If they have a monthly fee I'll hesitate since if I reduce my usage for a unspecified while I'll never know if I should cancel it or not. It requires being able to predict the future, which is a cognitive cost I can't overcome.
Don’t worry, there are both camps in the discord. So there’ll probably be pre-paid credits as well as subscriptions.
Or you could just stop thinking about it. Especially because your subscription + refund would cost you exactly the same. You may want to set a cap on searches to 20$ per month.
I used to optimise things excessively (eg. when grocery shopping, phone spending pay as you go) - then I stopped when I realised it's not worth the effort compared to what I make in a day.
I used to optimise things excessively (eg. when grocery shopping, phone spending pay as you go) - then I stopped when I realised it's not worth the effort compared to what I make in a day.
This is Proof of Stake.
Yes, this is the main argument in Clay Shirky's "The Case Against Micropayments" (2000) [1]. It holds up pretty well 20 years later.
Micropayments are not "pay $2 or $3 per month" (either flat-fee or average), there are plenty of successful examples of that. Micropayments are "pay $0.004 or $0.02 for reading this article or using this service now". As Shirky noted, the problem with micropayments are not the technology or transactions costs. The problem is that they require a huge amount of user time and attention, relative to the value of the item being bought. This has not changed in the past 20 years.
[1] http://mx.thirdvisit.co.uk/2002/10/04/theacaseaagainstamicro...
Micropayments are not "pay $2 or $3 per month" (either flat-fee or average), there are plenty of successful examples of that. Micropayments are "pay $0.004 or $0.02 for reading this article or using this service now". As Shirky noted, the problem with micropayments are not the technology or transactions costs. The problem is that they require a huge amount of user time and attention, relative to the value of the item being bought. This has not changed in the past 20 years.
[1] http://mx.thirdvisit.co.uk/2002/10/04/theacaseaagainstamicro...
I always thought of micropayments as the equivalent of buying a bag of quarter-inch mini-Oreos. It can be advertised as a way to diet, and some people eat just one and do fine, but the business model only works because brains are bad at summing up a lot of very small things, and most people will end up eating more mass of cookie than they would with full-size Oreos.
I'm the opposite. I'm sick of subscription service fees, and would much rather pay per view/listen/read.
I'm also annoyed I can't get a cell plan in my country that just charges me a flat rate per GB of data I use. Instead I pay a flat monthly fee that includes "free" call minutes and messages that I never use.
In both cases I'm sure I'm overpaying and cross-subsidising people who consume a lot.
I'm also annoyed I can't get a cell plan in my country that just charges me a flat rate per GB of data I use. Instead I pay a flat monthly fee that includes "free" call minutes and messages that I never use.
In both cases I'm sure I'm overpaying and cross-subsidising people who consume a lot.
I'm even more opposite than you on internet data usage. It is wonderful to never have to think about how much I'm using. It's just not a thing that ever crosses my mind. If I click on a link to a 10MB monstrosity of a page and most of it gets through my adblocker, all I've lost is time.
I also use my unlimited minutes to answer all spam calls and immediately turn my microphone off, just in case they pay by usage, but that is somewhat less critical :)
I can totally see the other side of it, though. My brain is just structured such that the money-to-mental-effort tradeoffs don't work out for me.
I also use my unlimited minutes to answer all spam calls and immediately turn my microphone off, just in case they pay by usage, but that is somewhat less critical :)
I can totally see the other side of it, though. My brain is just structured such that the money-to-mental-effort tradeoffs don't work out for me.
I'd like to support news sites behind paywalls by reading a single article for $0.25 but I'm not willing to pay $10 a month for a subscription if I just want to read a random article every once in a while.
There are two different use cases and we need support for both.
Personally I prefer flat rate for unlimited everything if we're talking cell phone. It's not like I'll cancel it from month to month.
But for $random_site that is linked to from HN... no way I'll pay for a subscription. But I wouldn't pay 0.25 either for one article. Give up on the whale pricing and charge 1 cent.
This use case also needs a frictionless way of paying. No way I'm making an account for each site.
Personally I prefer flat rate for unlimited everything if we're talking cell phone. It's not like I'll cancel it from month to month.
But for $random_site that is linked to from HN... no way I'll pay for a subscription. But I wouldn't pay 0.25 either for one article. Give up on the whale pricing and charge 1 cent.
This use case also needs a frictionless way of paying. No way I'm making an account for each site.
The whole Podcasting 2.0 / "value 4 value" movement is built on top of Lightning Network micropayments. It works. People use it. When you listen to a podcast that has the v4v tags in the feed using a compatible app you are given the option to send contribution based on how much you have listened. Also, you can send "boosts" which include a message that the podcaster could, for example, read out live.
I think the next step would be something similar but for blogging / text content.
PS: I myself wrote a RSS reader & podcast client that I released on the Umbrel app store. As you listen to podcasts, you can stream donations straight from the app running on your Umbrel node using funds you have complete custody of. It is pretty amazing.
PPS: In the Lightning world, micropayments can be as low as a millisat, which is 1/1000 of a satoshi. Routing fees are also very low and transactions are instantly confirmed.
I think the next step would be something similar but for blogging / text content.
PS: I myself wrote a RSS reader & podcast client that I released on the Umbrel app store. As you listen to podcasts, you can stream donations straight from the app running on your Umbrel node using funds you have complete custody of. It is pretty amazing.
PPS: In the Lightning world, micropayments can be as low as a millisat, which is 1/1000 of a satoshi. Routing fees are also very low and transactions are instantly confirmed.
There's also a lot of work happening in the gaming space for economies and rewards in virtual worlds. Zebedee is one, but there are others.
Bitcoin with Lightning finally makes micro/nano-payments practical and it's going to flip the Internet economy on its head.
Bitcoin with Lightning finally makes micro/nano-payments practical and it's going to flip the Internet economy on its head.
Mod parent up! I don't understand why these comments are being flagged. Too much white-knights in HN in opposition to open innovation.
I sometimes also wonder why are HNers so anti-Bitcoin, which - politics aside - is one of the major innovations built on top of the Internet.
It's very fashionable to dislike cryptocurrencies of any kind, which includes bitcoin. This is the most cogent explanation, as most discussion about it is rehashing the same few problems. Even if those problems have solutions or are not actually problems, nobody is convinced. That is why I'm convinced it's primarily emotional.
I think it's because the tech has been adopted as the disguise-du-jour of scammers and charlatans. Once the public understands better and the hype goes away then maybe we will actually be able to have some applications built that utilize the actual advantages of blockchain without dealing with the mental overhead of worrying that it's more than likely a scam.
Why is this downvoted? I'm atm streaming Coder Radio (using Castamatic), and streaming 40 sats/min back. I can send a boostagram with any amount to give feedback + value. It works and it works well. I really hope this will mean an ad-free feed at some point (so I hope this becomes popular).
To me this is the first and best example as of yet where I feel that a cryptocurrency/blockchain is delivering real value (for value). And indeed, I like it.
To me this is the first and best example as of yet where I feel that a cryptocurrency/blockchain is delivering real value (for value). And indeed, I like it.
This is cool and I’m a fan, but I don’t see how Lightning can be in good standing with the US when it explicitly ignores the Bank Secrecy Act.
There’s no one doing OFAC screening or compliance checks on these transactions, so of course it’s going to be cheap.
I would expect headwinds preventing this from going mainstream.
There’s no one doing OFAC screening or compliance checks on these transactions, so of course it’s going to be cheap.
I would expect headwinds preventing this from going mainstream.
If you are in US what are you going to do at tax time ? Each of those payments are a taxable event for you the payer. What a nightmare. No thank you.
It is not. This is "value 4 value": you donate money to a podcaster you like. Is tipping a street musician also a taxable event?
As far as I understand, if you tip a street musician using Bitcoin, it's also a taxable event in the USA: you have to pay capital gains taxes on the difference between the price you paid for that amount of Bitcoin, and the market price that Bitcoin has now. My understanding is that it's as if, on every Bitcoin transaction, you virtually converted it to dollars and back; that is, from a tax perspective, it's as if you had converted the Bitcoin into cash, tipped the street musician using that cash, and the street musician converted that cash back into Bitcoin, all in a single atomic transaction.
Why wouldn't tipping a busker be a taxable event?
http://keepstreetslive.com/faqs#:~:text=Yes.,tax%2C%20just%2.... UK example
OP asks about micropayments, your remake is not specific to btc lightning payments. So I guess this is something to solve (soon) on the government level.
Mod parent up! I don't understand why these comments are being flagged. Too much white-knights in HN in opposition to open innovation.
Maybe we can use Terra UST now.
We kind of do have it, but hidden behind prepays/pooled payments. Nobody wants to deal with people actually paying $1.5 for something. Just processing that from a card is not worth it unless you're a massive company. (AWS does charge me $0.46 for S3 on some account) But my Nebula subscription is effectively a few micropayments in a trench coat. Same for Vultr.
The only time I'm touching actual micropayments is when someone sends me $0.50 through Brave.
The only time I'm touching actual micropayments is when someone sends me $0.50 through Brave.
Why is 'after the fact' aggregation not something that took off.
Because you need to have an (enormous) upfront amount of cash to cover payments to the vendors and then have to deal with fraudsters using your service to test out if stolen cards are actually still good.
Meanwhile in India, offline micro payment has become more convenient than Cash. Look for UPI. Unified Payment Interface. I regularly make payment of INR 10 ( USD 0.13) for a cup of Tea at a roadside stall.
Can you say a bit more about how it works? Who runs the infrastructure to support it? Is it some kind of collaboration between the local banks?
[deleted]
In Europe and the UK there is now the Open Banking standard [1] that should technically make it a lot more feasible to do micro payments because it allows account-to-account transactions, therefore not needing to go through Visa/Mastercard processes and fees.
[1] https://standards.openbanking.org.uk/
[1] https://standards.openbanking.org.uk/
The cost of going through a payment processor for micropayments has always been more than the micropayment because the "security checks" over and above using TLS security on a website starts pushing the costs up _if_ done properly.
Saying that those costs should be coming down today compared to a decade or two ago because there is also much better surveillance, more bugs and backdoors/zero days have been found and with the global inflation stalking the planet, ironically it could be the inflation that helps make micro payments become more popular.
This is why advertising fees pay for search engine results and its an excuse to intelligence grab from businesses through their advertising criteria so its not just human end users who get surveilled.
Saying that those costs should be coming down today compared to a decade or two ago because there is also much better surveillance, more bugs and backdoors/zero days have been found and with the global inflation stalking the planet, ironically it could be the inflation that helps make micro payments become more popular.
This is why advertising fees pay for search engine results and its an excuse to intelligence grab from businesses through their advertising criteria so its not just human end users who get surveilled.
Maybe. One potential problem is that the banks aren't likely going to want to spend time dealing with verifying security and onboarding for smaller operators who want to use the APIs directly for this, which will mean aggregators have to get involved (who in turn will need to take a cut to cover costs and make a reasonable profit).
Yeah there will be that but if I'm not mistaken it isn't the banks who need to authorise individual API providers. There is a directory of allowed services that get whitelisted by the Open Banking "consortium" - I don't think a bank can then deny any requests coming from that list. However, you're still correct because to get whitelisted by Open Banking is in itself a long process and has requirements that makes it unfeasible for many small service providers.
Chargepoint: An electric car charging network.
You seed your account with $20. Sometimes charging is free, sometimes it's $1-2 dollars, and sometimes it's more. When your account gets low, they bill your credit card.
EZ Pass: The electronic toll network on the East Coast of the US. Works similar to Chargepoint. If you only drive a few miles on a toll road they deduct a few cents from your account.
You seed your account with $20. Sometimes charging is free, sometimes it's $1-2 dollars, and sometimes it's more. When your account gets low, they bill your credit card.
EZ Pass: The electronic toll network on the East Coast of the US. Works similar to Chargepoint. If you only drive a few miles on a toll road they deduct a few cents from your account.
Mircopayments (in the form of "Read this article without a subscription for 2 cents - click here") are one of those ideas that everyone claims they want but don't.
The only way consumers can use micropayments is to set up a subscription via a credit card (or similar). Either with the vendor themselves or via a thirdparty. They don't want to do that.
Publishers don't want to deal with the hassle of accepting 100000 small transactions, some percentage requires them to add sales tax, some percentage will fail, and a non-zero percentage will be reversed. In the face of these problems, getting a check every month for advertises seems like a much better bet.
The closest thing to micropayments for content makers is something like Patreon, where consumers pay a small amount up-front for access to future content. But even here, a small amount is usually a few dollars rather than cents.
The only way consumers can use micropayments is to set up a subscription via a credit card (or similar). Either with the vendor themselves or via a thirdparty. They don't want to do that.
Publishers don't want to deal with the hassle of accepting 100000 small transactions, some percentage requires them to add sales tax, some percentage will fail, and a non-zero percentage will be reversed. In the face of these problems, getting a check every month for advertises seems like a much better bet.
The closest thing to micropayments for content makers is something like Patreon, where consumers pay a small amount up-front for access to future content. But even here, a small amount is usually a few dollars rather than cents.
Why would you need a subscription? You could just add money to your account when it runs low. And the publishers wouldn't get small transactions, they would get paid out by the platform.
Platforms are very difficult to manage, with both consumers (with fake credit cards, reversals, etc) and producers (faking views to farm payments) possibly trying to scam you. There is a reason that none of them have really taken off despite years of trying.
It sounds like the only way you could possibly implement this is by having ad networks sell ad blocking. However, there are too many ad networks for this to be viable.
"That's a real nice clean browser window you have open there. Be a shame if it was covered in popups"
That would only work if the ad networks made more money off you with micropayments than they do with ads. If that was the case then you could be sure the ads would become so irritating to virtually force you to pay.
Plus, instead of just having your browsing habits, the ad networks would now have your credit card details. That sounds less than optimal to me.
That would only work if the ad networks made more money off you with micropayments than they do with ads. If that was the case then you could be sure the ads would become so irritating to virtually force you to pay.
Plus, instead of just having your browsing habits, the ad networks would now have your credit card details. That sounds less than optimal to me.
I feel like there's a way for crypto to be useful in this problem space, but I don't have faith that the actors who build such a system would be good-natured enough to make it a healthy environment, especially after all of the scammy projects that have surfaced these past few years.
I think back to when people used to tip dogecoins via a bot on Reddit. It was low-friction, low-cost, and seemed to seek no rent. A similar model may work well for micropayments (instead of microtipping), but I don't have enough faith in the current web3 sphere to develop this without it turning into a scam.
I think back to when people used to tip dogecoins via a bot on Reddit. It was low-friction, low-cost, and seemed to seek no rent. A similar model may work well for micropayments (instead of microtipping), but I don't have enough faith in the current web3 sphere to develop this without it turning into a scam.
While it isn't micro-payments as many think about them, we did run this experiment with cell phones. First it was SMS messages, commonly used to cost $0.10 per message. Still the case for a small group of people, and some may seek out pay as you go plans to optimize their bill, but for most, they prefer to just pay a little more monthly it seems and not worry about being billed for each one. (I know it's not a perfect correlation, but it is probably the largest scale study of pay as you go vs. other options that we have.)
I've been waiting (both with anticipation and dread) for a day when micro-payments are ubiquitous, as I think it's the only way to compete with the subscription and ad business models. I just don't know if people will really accept it given previous examples of it have played out. But I still hope someone gets it right, and I can pay 5c to read a newspaper article without needing to subscribe, and things like that.
I've been waiting (both with anticipation and dread) for a day when micro-payments are ubiquitous, as I think it's the only way to compete with the subscription and ad business models. I just don't know if people will really accept it given previous examples of it have played out. But I still hope someone gets it right, and I can pay 5c to read a newspaper article without needing to subscribe, and things like that.
India have this very well figured out with its Universal Payment Inferface (UPI)[1]. Payment of any amount small or big is possible online as well as offline. I use the same interface to transfer 100k+ to my trading account and also to buy vegetables from a roadside vendor for few rupees.
This is an open system so lots of competition and zero lock-in is possible. It's su successful that world's 40% digital transaction are hapenning in India.
[1] https://en.m.wikipedia.org/wiki/Unified_Payments_Interface
This is an open system so lots of competition and zero lock-in is possible. It's su successful that world's 40% digital transaction are hapenning in India.
[1] https://en.m.wikipedia.org/wiki/Unified_Payments_Interface
[deleted]
I love the idea but never saw a good implementation other than monthly billing or prepaid credits
I think the idea was coalesced in Jaron Lanier's Ten Arguments for Deleting Your Social Media Accounts Right Now: if there are no micropayments, there's no middle class. If there's no middle class, we're essentially doomed. So it feels logical that there has to be a marketplace for "ideas" and "thoughts", not just services. Creating a kind of global network of independent researchers as in E. M. Forster's The Machine Stops (1909):
https://en.wikisource.org/wiki/The_Machine_Stops
https://en.wikisource.org/wiki/The_Machine_Stops
The point of micropayments is to make it cheap to charge for content, whenever, wherever. In that context, a $2-4 payment is not a micropayment because it's a monthly subscription fee. That fee has baked in the cost of transaction processing.
Micropayments should be like cash on the Internet. No transaction fees, no filling out payment forms, and instant settlement. This would allow us to leave behind the SaaS pricing models and ad-funded models that have taken over the internet.
Micropayments should be like cash on the Internet. No transaction fees, no filling out payment forms, and instant settlement. This would allow us to leave behind the SaaS pricing models and ad-funded models that have taken over the internet.
It helps a bit if you look at the business ecosystem as being made of various fish sizes, up to huge krakens like Facebook. And everything is sitting on a tortoise called VISA.
The size difference between what we're used to think as "players" and credit card processors (and a few others) is fking huge. We don't have cheap micropayments because they don't want cheap micropayments, period. It's not going to change soon.
The size difference between what we're used to think as "players" and credit card processors (and a few others) is fking huge. We don't have cheap micropayments because they don't want cheap micropayments, period. It's not going to change soon.
Barter's been around longer than money. Each party in the trade has something the other party wants. No middleman.
For scarcer, non-local trades, maybe there's a long-distance bartering protocol waiting to be invented. Tell what you have and what you want, and wait. Optimizing trade chains might minimize shipping/handling (but take longer).
Expect bankers not to like this.
For scarcer, non-local trades, maybe there's a long-distance bartering protocol waiting to be invented. Tell what you have and what you want, and wait. Optimizing trade chains might minimize shipping/handling (but take longer).
Expect bankers not to like this.
I think you can expect many people besides bankers to not like a payment method from the Stone Ages.
Many of the limitations are around the values for payment processor minimums. With rapid inflation it will be a race to see if those values change first or the values of what we consider 'micro' today exceed their minimums making 'small-but-not-micro' payments easy because they are just normal payments in the eyes of payment processor policies.
DigitalOcean droplets: $0.007/hour.
Most of my servers run for a long period of time, but sometimes I do experiment with running a certain setup that I kill after a few hours or days. Knowing that I only pay per hour at the same low cost allows me to experiment more.
Those are not cryptocurrency micropayments, and the actual transfer aggregates to one accumulated, monthly payment.
Most of my servers run for a long period of time, but sometimes I do experiment with running a certain setup that I kill after a few hours or days. Knowing that I only pay per hour at the same low cost allows me to experiment more.
Those are not cryptocurrency micropayments, and the actual transfer aggregates to one accumulated, monthly payment.
Right, that's a microcost, not a micropayment.
Similarly Amazon charges by the byte of storage on S3, but bills monthly.
Similarly Amazon charges by the byte of storage on S3, but bills monthly.
Everybody coming in with the lightning angle, but I just want to point out that constantly having to sign micropayments is a pain. People really want prepaid draw down of the account. Having to approve every transaction is a horrible UX, but not something you would want to automate for crypto either.
The problem with micropayments is nontrivial.
In order to make micropayments work, you need to
1. have some sort of personal money-holding folder (it's so hard to avoid the word 'wallet' here), that you can easily fill (e.g. via your credit card). This moneyholder needs to be sufficiently safe for use, and should be password-protected. Ideally, it's a function or tightly integrated with your browser.
2. The website itself needs a moneyholder, though this could conceivably be implemented with limited functionality.
3. An easy to implement way to have small transactions from your moneyholder to the moneyholder of a website. To avoid creating issues around money laundering, the maximal height or a daily limit for transaction to one destination could be considered.
4. A legal way to retrieve funds from that moneyholder.
That's the easy part. Now consider the following:
1. The system should be useable regardless of the participants countries of origin, even in countries that have a cash culture and little implementation of credit cards...
2. ... but must adhere to international and national legislation (looking at you, Russian/Iranian/Cuban sanction regime)
3. A certain level of anonymity is advisable. The newsman at the newsstand has no idea what my name or address is when I buy a newspaper, and neither should the micropayment merchant.
4. Transactions need to be failsafe and fast. I don't want to first click through four layers of login screens and read an email before I get to reading the article I was about to buy.
5. Somehow, whoever manages this system needs to make enough money to support infrastructure and engineers, plus a profit. (The most easy way would be to demand a 5% processing fee for sending money into the moneyholder... I can see that approach failing for psychological reasons, though ("I put 20 dollars in there, why is my balance only 19$?")
All current net payment schemes fail in one of these fields. Paypal is comparatively fast and ubiquitous, but fleeces people with their fees. Cryptocurrencies are often slow - and processing fees are no joke, not to being with the volatility issues. I think GNU Taler [1] is interesting, but that by necessity would become a regional solution linked to local banks at best.
[1] https://taler.net/en/index.html
In order to make micropayments work, you need to
1. have some sort of personal money-holding folder (it's so hard to avoid the word 'wallet' here), that you can easily fill (e.g. via your credit card). This moneyholder needs to be sufficiently safe for use, and should be password-protected. Ideally, it's a function or tightly integrated with your browser.
2. The website itself needs a moneyholder, though this could conceivably be implemented with limited functionality.
3. An easy to implement way to have small transactions from your moneyholder to the moneyholder of a website. To avoid creating issues around money laundering, the maximal height or a daily limit for transaction to one destination could be considered.
4. A legal way to retrieve funds from that moneyholder.
That's the easy part. Now consider the following:
1. The system should be useable regardless of the participants countries of origin, even in countries that have a cash culture and little implementation of credit cards...
2. ... but must adhere to international and national legislation (looking at you, Russian/Iranian/Cuban sanction regime)
3. A certain level of anonymity is advisable. The newsman at the newsstand has no idea what my name or address is when I buy a newspaper, and neither should the micropayment merchant.
4. Transactions need to be failsafe and fast. I don't want to first click through four layers of login screens and read an email before I get to reading the article I was about to buy.
5. Somehow, whoever manages this system needs to make enough money to support infrastructure and engineers, plus a profit. (The most easy way would be to demand a 5% processing fee for sending money into the moneyholder... I can see that approach failing for psychological reasons, though ("I put 20 dollars in there, why is my balance only 19$?")
All current net payment schemes fail in one of these fields. Paypal is comparatively fast and ubiquitous, but fleeces people with their fees. Cryptocurrencies are often slow - and processing fees are no joke, not to being with the volatility issues. I think GNU Taler [1] is interesting, but that by necessity would become a regional solution linked to local banks at best.
[1] https://taler.net/en/index.html
Cryptocurrencies are not nessarily more volatile, but they are certainly slower.
I don't think you need to make the same tradeoffs because less decentralization is needed for micropayments. I think GNU Taler is a good solution but it is competing against a monopolistic surveilance network that the banks profit from.
I don't think the world/country can depend on a single company like PayPal. Once you get vendor lock-in, they will hike up the fees. GNU Taler would implement the same interface/API across different banks/vendors/wallets, so the individual switching cost (of going to another bank, for example) is low.
I don't think you need to make the same tradeoffs because less decentralization is needed for micropayments. I think GNU Taler is a good solution but it is competing against a monopolistic surveilance network that the banks profit from.
I don't think the world/country can depend on a single company like PayPal. Once you get vendor lock-in, they will hike up the fees. GNU Taler would implement the same interface/API across different banks/vendors/wallets, so the individual switching cost (of going to another bank, for example) is low.
I'm surprised no one has mentioned micropayment functionality inside say WeChat for example.
I confused the headline with micro deposits, like the 10 cents that gets deposited and withdrawn to link a bank account.
I wouldn't pay for my searches. I don't think I would pay for maps either. Plenty of alternatives.
I wouldn't pay for my searches. I don't think I would pay for maps either. Plenty of alternatives.
You used to pay for maps. On a long car trip, we would stop at a gas station in a new state and pick up a laminated foldable map of the local region for a few bucks.
Of course, we don’t do that anymore. Is Rand McNally still around?
Of course, we don’t do that anymore. Is Rand McNally still around?
Many states had free maps at their rest areas.
I think Rand McNally is still around. I think I bought a topo map they made just a few years ago.
In the online map world, there are free alternatives if any one of them started charging.
I think Rand McNally is still around. I think I bought a topo map they made just a few years ago.
In the online map world, there are free alternatives if any one of them started charging.
I had an idea for a video streaming platform where people would add money to their account and be deducted a penny per minute and then publishers would get bulk payouts.
Couldn't get many people interested though.
Couldn't get many people interested though.
It exists in games with their own currencies. In the cryptocurrency space. Online advertising sends micropayments to publishers. Spotify sends micropayments to artists. Cloud computing uses it too.
The interesting phenomenon in games is that "micro-transactions" aren't normally very small at all even though they are denominated in their own currency. Very much miles away from the fractions of a cent that people are talking about here.
Spotify and paying cloud companies are micropayments in the same way metered water and electricity are. In that they aren't. Both bill/pay out on either a regular schedule or a threshold.
Spotify and paying cloud companies are micropayments in the same way metered water and electricity are. In that they aren't. Both bill/pay out on either a regular schedule or a threshold.
The future of micropayments will be the Lightning network. It's still under heavy development, but people use it to stream instant sub-cent payments all the time.
Check out stacker.news as a live example.
Check out stacker.news as a live example.
The broader question in my mind is whether this is truly a painful problem for a large enough population of consumers.
At least in the US as long as every transaction is a taxable event what's the point.
But as long as it’s a percentage it shouldn’t matter if it’s a micro or macro transaction
Edit: my mistake was assuming any taxes are simple, see here for example: https://news.ycombinator.com/item?id=31389210
Edit: my mistake was assuming any taxes are simple, see here for example: https://news.ycombinator.com/item?id=31389210
Perhaps they will work, as in-app payments, inside Apple's walled garden.
Dogecoin is being used for micropayments and the tipping economy everyday, with fees that are well under 1c.
AWS
Recently, I've found myself paying for OpenAI's GPT-3 playground app in micropayments format. I use it for small tasks here and there and pay around 2-4$ a month. It feels totally fine and now I don't see why I wouldn't do the same for my Google searches or usage of maps.
Does anyone else have examples of services/products that they pay for in micropayments?