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BitPass: Micropayment That Seems To Work
Posted by
timothy
on Sun Nov 09, 2003 03:55 PM
from the mass-adoption-is-the-key dept.
from the mass-adoption-is-the-key dept.
Omega1045 writes "I have been following the story of BitPass for some time now. The micropayment solution provider has been featured on Slashdot before. That article focused on Scott McCloud, and his comic The Right Number. Since that story, BitPass has added a number of sites using their service. From this netizen, it looks like the idea is really taking off. Some news sources (NJ.com, SiliconValley.com) have noticed how this micropayment trend has progressed to include well known services like iTunes. I really like the idea of the artist getting a fair cut of the profits at BitPass."
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Still... (Score:5, Interesting)
Re:Still... (Score:5, Interesting)
I think it all comes down to whether there are enough people who don't mind paying for good content to support the creators.
I'm one of them, and while most of the content under BitPass at the moment isn't really my thing, a lot of it's certainly of high quality and well worth paying for.
And to me, viewing ads *is* paying. In a currency I don't want to spend.
- MugginsM
Parent
Re:Still... (Score:4, Interesting)
In real life you often get to personally meet those starving artists when you buy their wares or pay for performances; there's a real emotional connection there - not so online (usually). In Real Life you get a feelgood for supporting local artists, and you get a more meaningful "Thank You" when handing over your cash - online it's more antiseptic.
I would be 100 times more likely to pay for really great online content if:
--
Parent
Re:Still... (Score:5, Interesting)
BitPass has a nice model in that they offer a wide range of options. You can charge for specific content, charge for subscriptions to changing content, or just take donations. If they play their cards right, they'll be the next PayPal.
Parent
Re:Still... (Score:2, Insightful)
Re:Still... (Score:4, Funny)
Parent
Too early ? or never come ? (Score:5, Insightful)
The tendence might invert itself. But it will take a lot of time. And I even think maybe never because they will always be a drove of talended people making something for free.
Parent
Re:Still... (Score:4, Interesting)
The most important point, IMO, is that there are cognitive costs associated with the decision about whether or not to make a purchase that don't go away as dollar amounts decrease.
Parent
Re:Still... (Score:5, Insightful)
Personally, I don't mind at all paying for stuff on an "a la carte" basis. But, just like regular shopping, I want to walk into the store, pick out the thing I want, and buy just that.
I'm betting that, as usual, the first industry to take advantage of a working, widespread micropayment system will be the porn industry.
Parent
Re:Still... (Score:4, Interesting)
I resorted to using a torrent to get the 2.0 patch for America's Army, and I'm a believer now. I downloaded the 200+ megs in about 2 hours, and left the connection on all night to help out other downloaders. By the next day, I had served out 2gb on my torrent connection for AA before shutting it down. I'd rather "pay" using my bandwidth to serve other people, and get very fast service and good d/l rate, than have to sacrifice my personal information just to feed some marketers. Sorry guys.
Parent
Re:Still... (Score:4, Interesting)
On the other hand, people are perfectly willing to buy things over the web (consider Amazon or eBay), and they even seem willing to buy things over the web which will be delivered to them over the web (consider Magnatune).
I think that payments will prove to work fine for items which can be tried in advance or returned, and which are not part of the normal interaction with the site. And purchases depend exclusively on the good will of the purchaser; the content will be available elsewhere, and making it less convenient to get from the original source just reduces the chance that people will spend money on the original site.
Ironically, I think that the best model is to give away your content in a neatly indexed fashion on your site, and allow people to pay their choice of price to download exactly the same content in a zip file. Document who gets the money. People operate both as donors and as consumers, but not really both at the same time. On the web, it's hard to engage people as consumers (unless you promise to send them physical objects), so your best bet is to hook them as donors.
Parent
Re:Still... (Score:4, Insightful)
People are totally willing to pay for internet content. See all these consumers who put down $40, $50, even $70 monthly for high-speed connections?
They wouldn't spend like that unless they desired internet content enough to give money for it. They only problem is that today they give this money to ISPs, not content-creators. Viewers are willing to pay for content; they're just not willing to buy content. If the cumbersome, distracting, and insecure process of paying for a website were removed, readers would have no problem forking over some cash. Removing those procedural obstacles is the quest of every micropayment project.
I'd be happy to give slashdot $0.02 per page I read, which would cover their bandwidth and then some. (Typical rate for one banner impression is much, much less than a penny. But few readers would hestitate to give $0.01 to read a good page. The time it'd take to transfer that money traditionally is more valuable than the cash itself)
PS. Part of the reason so many people feel guiltless about collecting MP3s off P2P is that they are paying for them already. File-sharing is an expensive hobby. They just pay Comcast and Dell instead of the RIAA.
Parent
Re:Still... (Score:3, Funny)
It'll be the same day humanity evolves to the point where they have no need for money.
Not cheap, very high cost per sale. (Score:3, Informative)
15%! Are they crazy?
Re:Not cheap, very high cost per sale. (Score:2, Funny)
Not if they round up... (Score:2)
Re:Not cheap, very high cost per sale. (Score:5, Insightful)
Parent
Re:Not cheap, very high cost per sale. (Score:2)
I can get a flat rate at $0.30 a transaction, with a $60 monthly fee if I provide my own merchant account. What the hell providor are you using?
Re:Not cheap, very high cost per sale. (Score:2)
I think the whole point of all micropayments is that they work out cheaper for very small payments, but when $2 at BitPass rates is $0.30, and PayPal is $0.35, its looking like you want to use BitPass only for *really* small transaction costs, but when the difference is so small, you might as well give out more for $5
Re:Not cheap, very high cost per sale. (Score:2)
There's a reason most charge a minimum fee which are orders of magnitude higher. Personally, I can't see how this could be profitable at all.
Kjella
Another micropayment solution (Score:2, Interesting)
"...really taking off."? (Score:2, Funny)
All micropayments this year don't equal what Warren Buffet loses in the wash each week.
Something on topic (Score:5, Insightful)
I think "home grown" service like BitPass are just the key for up and coming artists. Offering a service at such a small amount of money is very marketable. This is possible for the artist because the they gets such a large portion of that take. On an average CD, the artist makes much less than a dollar. That is a very small percentage @ $12 to $15 for a new cd!
Imagine a YOUNG Metallica level artist on their way up. Instead of using traditional means, they offer their LP at $2, on BitPass via MP3. They make much more per album than they would through traditional means. They don't have to sell near as many albums to be a huge financial success, and continue to make their music or whatever.
Sounds like success to me! I can think of a few local bands that I wish were still around, but simply could not afford it. A succesful BitPass style service could have really helped them!
Marketing Cost (Score:2)
If you have never heard of a band, and cant beaucse they arent marketed beyond their town, what difference does it make if they get more % back on an album.
There IS a cost to market, and the bands cant do it on their own when they first start out..
Micropayments wont help that a bit.
But like i said above, taking 99% of the money fronted and claiming it was 'for marketing purpo
Obligatory PA Link (Score:5, Funny)
-Trillian
Obligatory follow-up (Score:4, Insightful)
G&T are hilarious, but heavens, they do shoot their arrogant little mouths off sometimes. Micropayments may not work, and Scott McCloud may not be right about everything (or even anything), but (1) as a hard-working veteran artist who was drawing comics when the PA crew was in diapers, he deserved more respect than they gave him, (2) as a veteran embracing change, a creative mind trying to test out new, risky ideas, he deserved more respect than they gave him, and (3) as somebody who is -- hello! -- trying to figure how they can make a living from their craft, he deserved one heck of a lot more respect than they gave him.
They ended up eating a bit of crow over that comic -- mostly because McCloud himself responded by being persistently civil to them until they realized what a couple of assholes they were. But they did realize, and came back with the kind of civility their satire ought to have carrier from the beginning. Tycho: "Reader response to Friday's thingy was profoundly, powerfully negative (Which Scott even apologized for - can you believe that?)
Parent
Where does it end? (Score:3, Insightful)
Re:Where does it end? (Score:3, Insightful)
Filters (Score:3)
Pointless, and here's why (Score:5, Interesting)
We initially volunteered for the trial, but didn't bother once we heard of the terms- basically, 15%, same as paypal. Our users would have objected to keeping a balance they couldn't use anywhere else. Worse, we'd loose ANOTHER 15% because they(at the time) only supported PayPal for transferring funds. Worse, they only do the transfer when it gets to a certain size. Micropayments, macrotransfers, mean that not only are they ripping you a new one on the 15% fee, but they're ALSO getting your interest.
Call me silly and slap me stupid, but the point of micropayments was to make small payments economically viable. I don't call "three times a credit card processing fee" viable for what amounts to nothing more than a proxy service.
All Bitpass does is play "mini paypal", and that's neither original nor novel. Next, please. That technology involving random numbers+statistics looked far more promising....
This is not new! (Score:3, Informative)
Kind of Pricey (Score:5, Insightful)
For items priced $5.00 and higher, the transaction fee is 5% + $0.50.
15% is one helluva chunk to take for being the clearinghouse for micropayments, and the over $5 fee is roughly twice what you'd pay through a US commercial gateway.
Not even attempting to be competative (Score:3, Interesting)
Unless you have a personal account in which case it's free (but you can't take credit card payments). The only way BitPass beats PayPal is under $2.35 for a transaction. For a $5 transaction I pay about 41 cents to PayPal where I'd be charged 75 cents for BitPass.
I don't like micropayments and although I could save all of 19 cents in fees per $1 account, there's no way I'm going to use two on-line payment compan
Where's Visa? (Score:4, Informative)
What I'm trying to ask is a two part question
1) These services are going to have to go through the same growth problems all new financial services go through. Not all new financial servers are viable economically, and it's possible that micropayments are not viable.
2) Why doesn't AMEX or Visa offer some sort of micropayment system? They've already got the basics for one right now: it's pervasive, easy to use, familer, and cost effective for many transactions. You just add an aggregator account for micropayments along with a dab of crypto and there you go: instant micropayments.[1]
-jbs
[1] the aggregator account would work like a till. Each micropayment get's tagged and signed by the payee's pubkey. At the end of the month, everybody get's paid and billed, just like they do now. The user can manage their micropayment wallet by adding/removing cash/credit (that way you can't just rob someone blind). The merchent get's the % taken out of the total of the aggregated account for processing fees. You could even use this on vending machines, cardswipe+pin and the charges get aggregated daily instead of monthly (all cryptocash emptied from this machine daily).
BitPass trust and legal problems (Score:5, Interesting)
This is even weaker than Verisign's lower class of SSL certificate. Verisign at least requires a Dun and Bradstreet number.
There are far better seal programs, such as the classic Good Housekeeping Seal of Approval [ivillage.com]. That's an actual warranty. "If a product bearing the Seal proves to be defective within two years of purchase, Good Housekeeping will replace the product or refund the purchase price." "Entrust" doesn't come anywhere near that.
Then there's the question of whether BitPass is a payment service or a reseller. iBill, for example, is a reseller. When you buy something through iBill, the actual "merchant" is iBill, and if you want a refund, you can get it through iBill's customer service operation. Getting it back from the site operator is iBill's problem, which is why they take a big cut and hold back payments for weeks.
BitPass doesn't seem to be set up that way. BitPass is, in a sense, "selling money" That may create problems. Credit card issuers don't allow merchants to "sell money"; that's a loan, which comes under banking laws. Also, the U.S. Government has a monopoly on money. Casinos in Las Vegas used to take each other's chips, but that was ruled to be a "currency" years ago, and they had to stop.
Worse, the BitPass site does not disclose the name and address of the business before asking for a credit card number. They've set things up so it's hard to get a refund. They don't disclose their refund policy. That's a criminal offense in California (B&P code 17538) [ca.gov], where BitPass apparently is located. That's good for six months in jail. Here's the law, which is very specific, so sleazy operators can't hide the required info and claim they comply.
(1) Before accepting any payment or processing any debit or credit charge or funds transfer, the vendor shall disclose to the buyer in writing or by electronic means of communication, such as e-mail or an on-screen notice, the vendor's return and refund policy, the legal name under which the business is conducted and, except as provided in paragraph (3), the complete street address from which the business is actually conducted.
(2) If the disclosure of the vendor's legal name and address information required by this subdivision is made by on-screen notice, all of the following shall apply:
(A) The disclosure of the legal name and address information shall appear on any of the following: (i) the first screen displayed when the vendor's electronic site is accessed, (ii) on the screen on which goods or services are first offered, (iii) on the screen on which a buyer may place the order for goods or services, (iv) on the screen on which the buyer may enter payment information, such as a credit card account number, or (v) for nonbrowser-based technologies, in a manner that gives the user a reasonable opportunity to review that information. The communication of that disclosure shall not be structured to be smaller or less legible than the text of the offer of the goods or services.
(3) The complete street address need not be disclosed as required by paragraph (1) if the vendor utilizes
Not really micropayment, but... (Score:5, Interesting)
With a pay-per-view thing, I'd always be asking myself "do I REALLY want to see this, or can I live without it?" and end up missing a lot of stuff.
Re:Not really micropayment, but... (Score:3, Insightful)
Shirky: "BitPass Will Fail" (Score:4, Interesting)
I have to say I agree with him on this. He makes several very good points about micropayments, free content, and how the Internet shifts the balance of power from publishers to consumers.
How about Wallie? (Score:3, Interesting)
Credit cards... (Score:4, Insightful)
I'm seventeen. I wouldn't mind paying for stuff if its good, but there's always one thing I run into that I can't do anything about. I'm underaged, so I can't get a credit card. Internet payments would be its only use, so getting one to the family wouldn't be meaningful either. And when I become a poor student, no bank in their right mind will want to give me one either. Nor am I sure I want to even get one, with the trail it leaves behind.
Add to that that I'm not from the United States, and it all amounts to just too much trouble to go through for the possible benefits and warm-and-fuzzy-feeling. What I'd like to see are some sort of bitpass cards that anyone can buy from a store. Before that happens, micropayments won't work on that meaningfully. Internet users under eighteen aren't that far and inbetween, although I admit that most just play CS and no little else. :)
Re:Credit cards... (Score:3, Insightful)
Re:Credit cards... (Score:3, Interesting)
Re:Credit cards... (Score:3, Informative)
Actually, it's really easy to get a VISA. You can get a checking a
Pay what it's worth (Score:3, Informative)
Agree, other people do it to... (Score:3, Interesting)
There are people who, however, rather would like that only the stores were there in the mall. These people call in the local mall-security or the law-enforcement people, who make sure they are thrown
Re:Pay what it's worth (Score:3, Informative)
But I don't expect to be paid... that's the whole point. I put up my blog [colingregorypalmer.net] because I like doing it, and if someone wants to give me some money for my efforts, then I'm happy to take it. : )
Plain and Simple... (Score:3, Interesting)
Among the geeks, however, many still think that actually *buying* things online makes you some sort of sellout. I have been made fun of before for buying shareware - since the person making fun of me had the same software but didn't have to pay $29.99 for it.
Until both groups (standard users and geeks) come to accept that it is quite ok to spend money for something online, we are going to continue to see resistance to these sorts of services.
-danielrm26
Doesn't really take into account small sites... (Score:4, Interesting)
What BitPass is asking is to install a 'gateway' [bitpass.com] to allow their service to work. They claim the service will thus work in 30 minutes [bitpass.com]. In the majority of cases, with small sites, there will however be extra hassle because of the way BitPass has to be installed.
It could even be impossible to install BitPass on cohosted sites, who knows ?
Ofcourse it's still a beta, but they got to do better than that...
Money Tied Up With One Company (Score:4, Insightful)
The way that BitPass operates is thus the biggest problem here. As much as I chafe at having to purchase the latest installment (great, get me hooked on something free then wait forever to continue it and start charging) and the micropayments idea in general having my money locked up by one company is a problem. Even if there were multiple places accepting BitPass it would still be a bad idea unless they had a clear monopoly. Regardless of whether micropayments are good or bad, BitPass is a terrible implementation.
Re:Of course (Score:2, Insightful)