Micropayment on the Web: It's Only a Matter of Time

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Remember Micropayment? A system on the web that allows content creators and consumers to have small money transactions, like 50 cents. So that, all those opinion or otherwise blog writings, art drawings on various sites, photos, music clips from random Joe, that you enjoyed, you can easily pay them few cents, and they can easily get what they deserve.

The millions of works by students, creative people, amateurs, each often just have few blog pages or few drawings or photos etc. But collectively, their work probably is more worthy than the collective work by professionals. Blogs, Google image search, Wikipedia, are good examples.

In the past, it is not possible for these people to show their work. They'd have to go to a publisher with printing press, or music studio with Record or CD press. These random Joe's & Jane's, your pop & mom, your brother and sisters, neighbors, even less worth than the name “amateur”, don't have the means and time to even think about “publish”. Nor would any publisher consider publishing a few pages of diaries. The internet changed all this.

Micropayment was once believed to be the future of the web. The W3C group once tried to create a protocol for this, but aborted. Lots of companies in the dot com days also tried to offer micropayment service as a business, but they failed. Today, we just have banner ads, notably Google's AdSense, that somewhat act as a substitute for micropayment, comparatively annoying and ineffective.

In 2002, a promising startup on micropayment service: Bitpass, also closed doors in 2007.

The well known comics artist Scott McCloud is a advocate of micropayment. He wrote a essay 〔Misunderstanding Micropayments: BitPass, Shirky and The Good Idea that Refuses to Die By Scott Mccloud. @ www.scottmccloud.com…〕. This essay is a response to Clay Shirky, who criticizes micropayments, saying that it'll never fly. After reading both, i think Clay's essay does contain some interesting argument, however, in my opinion, his criticism on micropayment is incorrect, as pointed out by Scott.

The interesting question is, of course, why isn't micropayment popular today? I think the ultimate reason is that it lacks a infrastructure. To argue about it clearly, we should start to define exactly what it means. The meaning is not clear by its debaters. At one extreme, it is meant to be a world wide system, at internet protocol level, so that any reading of web is tracked. At the other extreme, any service, such as a website, that lets content creator to ask payment, and lets consumer to pay, is also a micropayment. The implicit understanding of micropayment can be anything in between. The definition can be on technical level as networking protocols, or can be on model of business transaction. So, overall, it could mean quite a lot things. To say that micropayment failed, also needs a clearer definition, that is not seen in most articles or debates.

If the web started with micropayment protocol, then, as users browse the web, they simply get monthly bills from their Internet Service Provider, much like phone bills. The content creators, the more popular is their sites, the more they get paid, automatically. Of course, the Internet didn't start that way. In fact, it started rather against tracking, as a military research project, as one of its original design goal. (See: History of the Internet)

In today's “Web 2.0” days, all sort of tracking are eventually hacked in or patched onto the web tech, one way or another. For example, all the websites that requires you login, and sites that involve money transactions such as stock sites, bank sites, paypal, online stores. Even banner ads that we see in all sites, require tracking. And lots sites have Geo targeting, where they can show you restaurants, clubs, news, that are near you, without you telling the site where you live on earth. All these are quite convenient and often necessary. Web without these would be a lot less useful. Technology wise, it starts with cookies, and JavaScript , together with IP address database and hacks like Web bug, Ajax, etc. A systematic low level protocol is still unlikely, but these tech as web evolved do a ok job as needs arise.

I don't think that micropayment is a failure. In fact, that in one form or another, it will the norm used by everyone, as a matter of time. The internet, in the past 2 decades, as a communication technology, created major changes to society, gradually. It is simply NOT POSSIBLE, for the concept of micropayment not be the common practice in society, as we advance into the future.

Many things take decades to take shape. For example, credit card took few decades. Debit card, is today gradually replacing credit cards, also took a couple of decades.

Lots sites today have donation buttons, that let you pay by credit card, without needing to sign up to some micropayment service site. (Wikipedia for example, does this, successfully) This can be considered a form of micropayment already.

I'm writing this because, interestingly, today i discovered a new micropayment site: Flattr, http://flattr.com/.

I think the web is experiencing a resurgence. Web 2.0 is flying wild. Google is making lots of things free like in dot com days, yet making a profit. I also see lots of new sites and ideas sprang up in the past year.

Martin Riley wrote to me about his new micropayment service site: http://www.carrot.org/.

As of today, bitcoin is making the rounds, and Google Wallet. Also, paypal introduced micropayment.

Apple with its extremely successful Apple Store for iPhone, iPad, with many or most apps priced at $1, can also be considered as a micropayment system.

Greg Golebiewski wrote to me about a new micropayments site http://www.znakit.com/

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