Micropayments Are A Macro Opportunity

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Micropayments Are A Macro Opportunity

I found an article at Marketing Week called “Why the Subscription Economy Hasn’t Peaked”. It looked interesting and relevant to something I was working on so I clicked on it to read it. I was faced with two subscription options (£ 7 per week or £ 18 per week for the “ultimate” package) that I was not interested in.

It’s nothing against Marketing Week, which is an excellent release, but I just don’t want another subscription! I understand why subscriptions make sense to them, but it doesn’t make sense to me. If I had the option to pay a dollar to read the Marketing Week article, I would have happily paid it, but without that option neither of us was satisfied: I couldn’t read the article and they didn’t get any money.

We are long overdue for a smooth micropayment infrastructure to provide a different kind of internet based on non-advertising content.

I already have a subscription to The Wall Street Journal, The Economist, and MIT Technology Review (and Tabletop Gaming which is excellent) and I don’t read even a fraction of that content. Every now and then I want to read something in the Times or the New York Times NYT or the American Banker or Wood Magazine or Men’s Fitness, but I don’t want to subscribe to any of them.

In other words, I like to give you tips for good content, but I don’t want to give you my email address, my bank account or my credit card details!

What I want is a system where I can click a button called “Pay $ 1” and then start reading the article. If I had to hit the “Pay” button and then enter my credit card details and personal details, as well as the amount etc etc, I wouldn’t do that, especially if I had to pay $ 2 to cover the transaction fees imposed by the platform , the acquirer, the system and the issuer.

Hands in the glass.

Helen Holmes © 2021.

NFT available directly from the artist at TheOfficeMuse (CC-BY-ND 4.0)

I have the dollar and I want to pay, but I can’t. I can go to a store and buy a pack of gum for a dollar and pay instantly with my contactless card, but I can’t do it online. I wrote an article for Finance on Windows magazine two decades ago pointing this out. I introduced the concept of the red button on the keyboard and imagined that while surfing the internet you would hit the button to send a quarter (or whatever) to the person who wrote the page you are looking at have viewed.

I’m not just a person who pondered this. Well-known venture capitalist Marc Andreessen knows more about the Internet than I have ever before and said at a Wired magazine conference in New York in 2012 that “we should have made payments in the browser.”

(You are halfway there, because in addition to the well-known 404 error for pages not found, your browser also shows the 402 error for the payment of the page. However, no payment mechanism has been provided.)

I note that the Collisons (the brilliant brothers behind Stripe) have also been cited on the grounds that the lack of an effective payment mechanism is the reason the web has gone from being an open environment and opportunity for everyone to an “oligopoly” controlled by five companies now worth more than $ 3 trillion “.

A few years ago, Mance Harmon wrote here in Forbes that “today’s business models are not designed to protect consumers” and talked about the problems of trying to build micropayments on top of the old infrastructure. He was right: but what will stimulate the demand for micropayments and what technologies can be used to meet that demand? And not just for magazines with an established brand – what about the content creators trying to connect directly with their audience?

There have been a number of attempts to take a different approach by avoiding touching the payments infrastructure and monetizing the overall attention. An interesting example is the Brave browser’s “Basic Attention Token” (BAT), the core of its “Brave Rewards” proposal. As you surf the Internet, the browser increases the amount of attention you spend on websites you visit and divides your BAT monthly in proportion to that attention and sends it to websites you visit. I’ve seen a couple of pitches for startups looking to do something similar for news and entertainment sites, but I think a more Tip Jar-like approach is gaining traction. I think a good micropayment system provides the allure itself!

Tip for a winner

Amber Case says micropayments could become a “new financial interface” where both creators and consumers can participate in the web economy, “and I agree. We need a mechanism that is a button that is a solid one Tip sends (let’s say) $ 1) to the content creator, but I also don’t see how we can do that by adding another layer on top of the old payment network.

Then what could this ideal form of micro-payments deliver? What will it do if the current layer of payments infrastructure cannot? The Diem US dollar stablecoin and the Novi wallet on Instagram, WhatsApp and Facebook. May be! Suppose the content creators could post to Facebook and get paid in Diem with no transaction costs? That would make it a serious content platform for sure!

Fortune Global Forum - Day 2

Marc Andreessen said Bitcoin could provide a micropayment solution for the web (photo by … [+] Kimberly White / Getty Images for Fortune, 2015).

getty

Other people talk about what are known as “Level 2” solutions built on top of cryptocurrencies, and who knows, they may be right in the long run, but not now. Mr. Andressen said years ago that a “use case for Bitcoin is micropayments”. Realizing that it was not cost-effective to make small payments through the existing payment infrastructure, he felt that Bitcoin’s divisibility would make it easy to send a thousandth of a cent to anyone in the world for almost free, but unfortunately it is not happened .

A decade later, and instead of the futuristic, seamless “Pay” button based on cryptocurrency, we have Twitter’s “Tip Jar” instead, which uses neither Bitcoin nor digital currency, but instead adds another layer on top of the creaky payment system to provide a means create to send someone a dollar while revealing your Paypal PYPL address and paying a one-third transaction fee.

(Tip Jar just sends you to a third-party payment platform: PayPal, Venmo, Cash App, Patreon, and Bandcamp.)

It seems to me that it will be the central bank digital currency of one form or another. Not bitcoin, not a tipping system built on top of PayPal, built on credit cards built on bank accounts built on central bank digital money. If Twitter has access to my CBDC wallet, it can simply transfer £ 1 from my wallet to the creator’s wallet with the alias built into a well designed CBDC. I can’t see any personal information from the creator (unless they want me to), and the creator can’t see any of my personal information (unless I want them to).

The micropayments dream from the earliest days of the internet could soon be realized, and I’m sure the implications of it are much, much more than helping a few Tik Tok teenagers get paid for what they Tik on Tok do.