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BitPass: Micropayment That Seems To Work 180

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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BitPass: Micropayment That Seems To Work

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  • Of course (Score:-1, Interesting)

    by Sir Haxalot ( 693401 ) on Sunday November 09, 2003 @04:57PM (#7430039)
    whether this works or not depends on how many people use it. Time will tell if it suceeds or fails.
  • Still... (Score:5, Interesting)

    by UPAAntilles ( 693635 ) on Sunday November 09, 2003 @04:58PM (#7430045)
    It doesn't fix the fact that most people don't want to pay for internet content in any way, shape or form. Case in point- IGN. Even though that was subscription based, it's complete "collapse" as it were was caused by moving to the pay model. Fileplanet is having the same types of troubles, as their "exclusive" downloads quickly become not so exclusive. People aren't ready to move beyond advertiser supported web content in droves. It's too early.
  • Re:Still... (Score:5, Interesting)

    by Muggins the Mad ( 27719 ) on Sunday November 09, 2003 @05:08PM (#7430092)
    > It doesn't fix the fact that most people don't want to pay for internet content in any way, shape or form.

    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
  • Re:Still... (Score:5, Interesting)

    by worm eater ( 697149 ) on Sunday November 09, 2003 @05:09PM (#7430099) Homepage
    It will certainly take time for the "internet = free" mentality to pass. Major services like Yahoo are gradually moving previously free services over to subscription models. iTunes (et al) are providing indications that people are willing to pay -- even though iTunes itself doesn't make money for anyone but the record labels, and in some cases, the artists. So yes, it will take a little while, but we'll get to the point where people think about it like television. Some people will pay a premium for the extras (cable) -- and some people will just stick with the standards (broadcast networks).

    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.
  • by Anonymous Coward on Sunday November 09, 2003 @05:11PM (#7430107)
    can be found at www.kopek.net

  • by SuperBanana ( 662181 ) on Sunday November 09, 2003 @05:23PM (#7430153)

    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....

  • Re:Still... (Score:4, Interesting)

    by znu ( 31198 ) <znu.public@gmail.com> on Sunday November 09, 2003 @05:26PM (#7430161)
    I really don't think it's just a matter of "too soon". The whole idea of micropayments is probably doomed. This [shirky.com] presents the case far better than I could.

    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.
  • by Animats ( 122034 ) on Sunday November 09, 2003 @05:54PM (#7430246) Homepage
    BitPass has a prominent "Certified by Entrust" logo on their web site. It means very little. Read their certification practices statement [entrust.net], which guarantees almost nothing, disclaims liability for almost all cases, limits liability to $1000 per certificate (i.e. everybody scammed by one site), and even calls for the "relying party" (the customer) to indemnify Entrust.

    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.

    • (d) A vendor conducting business through the Internet or any other electronic means of communication shall do all of the following when the transaction involves a buyer located in this state:

      (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

  • by DrEldarion ( 114072 ) <[moc.liamg] [ta] [0791uhcsm]> on Sunday November 09, 2003 @05:55PM (#7430249)
    Instead of the micropayment route, I've always preferred the idea of paying one monthly fee then getting unlimited content for that fee. It's like those "adult passes". You pay them a monthly fee, then when you visit a member page, they pay the page for you.

    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.
  • by gilgongo ( 57446 ) on Sunday November 09, 2003 @05:55PM (#7430251) Homepage Journal
    Clay Shirky, the undisputed king of thinkers about the Internet (well, almost) says micropayment systems are doomed in a paper he wrote a couple of months back [shirky.com].

    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)

    by Pflipp ( 130638 ) on Sunday November 09, 2003 @06:00PM (#7430263)
    I was surprised that this never got discussed on /., but there is a *very active* campaign going on in Holland to promote pre-paid cards for use on the Internet. It's called wallie [wallie.com], and at least we are interested to use it on our little web sale project.
  • Plain and Simple... (Score:3, Interesting)

    by danielrm26 ( 567852 ) * on Sunday November 09, 2003 @06:16PM (#7430314) Homepage
    There is a culture of ignorance among regular users that dictates that anything that costs money on the Internet is some sort of scam, so they avoid most of them. Not only that, but many are still very nervous about moving money online.

    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.

  • by thrill12 ( 711899 ) on Sunday November 09, 2003 @06:21PM (#7430339) Journal
    Small sites usually do not control their own webservers and are hosted along with other sites.
    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...
  • by thrill12 ( 711899 ) on Sunday November 09, 2003 @06:32PM (#7430390) Journal
    whenever I go to a big shopping mall, I see people making music. They work according to the same model, even though they are not really earning much by it, and even though they use a hat-way instead of a BitPass way to get money. Some people are really interested in the music they make, and throw in some money.
    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 out.
    Now only the big stores are left. Why? Because they pay rent to be there.
    You are not paying rent, or can't pay rent of the little money you earn, so you have no right to be there.

    I hope that analogy will not have any place in the internet...
  • Re:Still... (Score:4, Interesting)

    by silentbozo ( 542534 ) on Sunday November 09, 2003 @06:43PM (#7430444) Journal
    Supply and demand. Fileplanet can only afford so much bandwidth to free downloaders. Unfortunately for them, people like me, who hate being forced to turn on Javascript so they can push ads, and who don't want to wait for overloaded servers to queue up our downloads, can now use bittorrents for the more popular items.

    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.
  • Re:Still... (Score:4, Interesting)

    by Saeger ( 456549 ) <farrellj AT gmail DOT com> on Sunday November 09, 2003 @06:52PM (#7430484) Homepage
    comes down to whether there are enough people who don't mind paying for good content to support the creators.

    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:

    1. I was recognized as more than a number (or a /. '*') for my contribution.
    2. I had some idea of the artist's bottom line so I knew how badly they needed it vs. some other artist who's just as worthy but not as arbitrarily popular/rich [shirky.com]. Call it an OpenBottomline, kind of like this [scarywater.net]. I don't like sending my money down paypal blackholes.
    3. The content was released under a more open license [creativecommons.org] that allows everyone to stand on others' shoulders, rather than the default Disney "AllMineMineMine!" copyright.
    4. If there was some easy mechanism [firstmonday.dk] to pool my money with others to finance the creation of works we want.


  • Logic & Viability (Score:2, Interesting)

    by LiquidFun ( 674238 ) on Sunday November 09, 2003 @07:13PM (#7430568)
    A short, but interesting read on the:

    Logic & Viability of Micropayments

  • Re:Still... (Score:4, Interesting)

    by iabervon ( 1971 ) on Sunday November 09, 2003 @07:22PM (#7430607) Homepage Journal
    People don't want to pay to browse a site; HTML and HTTP just aren't very good if there are costs associated with them. People complain about needing subscriptions even when those subscriptions are entirely free, just because the subscription mechanism interrupts their access to information. They can't necessarily post links and cite the work or get at it from a different computer seemlessly.

    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.
  • Re:Credit cards... (Score:3, Interesting)

    by ChaoticLimbs ( 597275 ) on Sunday November 09, 2003 @10:19PM (#7431467) Journal
    Here in the USA you can get gift cards which are VISA cards, and have only the vendor's name on them. They're prepaid. Simon Properties offers them at several malls in the US. They are the perfect anonymous payment.
  • Rebutting Shirky (Score:2, Interesting)

    by danharan ( 714822 ) on Sunday November 09, 2003 @10:43PM (#7431588) Journal
    I too was convinced after reading Shirky's essay. Then I read Scott McCloud's rebuttal [scottmccloud.com], and I have to say it is quite convincing.
  • by KalvinB ( 205500 ) on Monday November 10, 2003 @12:06AM (#7431964) Homepage
    Paypal is 2.2% + $0.30 USD to 2.9% + $0.30 USD. The higher rate is for foreign transactions.

    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 companies for my site. Especially since the next tier of my subscription is $4 in which case PayPal is cheaper. I charge for a time period of unlimited access. Not per file or other such garbage that people are attempting to do micropayments for.

    I'm with Penny-Arcade on this one. If what you're selling isn't worth paying at least a dollar for, then don't sell it.

    I'm not going to pay you a quarter to read your comic but if it's good I might pay you $5 to get access to all the old comics for a year.

    A quarter is an annoyance. Five bucks is a real amount of money which people will pay for quality merchandise.


10.0 times 0.1 is hardly ever 1.0.