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Ask HN: Why aren't micropayments a thing?

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131–140 of 194 posts

Re: Ask HN: Why aren't micropayments a thing?

#131

Aren't micropayments on mobile platforms a big thing in India, China, and Africa? Practically things like Spotify and Netflix are microtransactions; you just don't have to worry about the details of how much each product costs. Unfortunately the incentives for these marketplaces are to power them with subscriptions instead of, say, a monthly bill, and so what tends to happen is fragmented markets where new players ho…

These locations never had a widespread creditcard infrastructure. The US cc companies pretty much have a monopoly on transactions. And 3rd parties build top of that.

Re: Ask HN: Why aren't micropayments a thing?

#132
While the comments cover a lot of ground there are two things that aren't completely addressed in my opinion.

1. It's not merchant fees or inconvenience. E-wallet apps are very common in Asia and they let you load an amount once and pay multiple smaller amounts. They even auto reload.

They're, at least for the time being, cheaper then using any other payment gateway and are even free most of the time.

They're also in fact quicker and more convenient than using a credit card because your phone is more likely to be at hand and the transaction often involves just scanning a QR code and tapping confirm.

They're a very viable way to do microtransactions.

2. Culture

Microtransactions have been around for a long time in Asia so have good adoption rates. This was the result of having to pay transaction fees in USD but having a currency that's a lot weaker. Think having to pay $1 for lunch and the transaction fee being $0.50.

In the west, not so much. People aren't used to doing that because companies prefer a steady income from recurring subscriptions and the cost of transactions are proportional. Quite a few things that don't need to be subs are for some reason.

In Asia subs are a higher threshold for sales. (At least they used to be, they're much more common now.)

Re: Ask HN: Why aren't micropayments a thing?

#133

The problem is the mental overhead, not the fee. If every single article click adds an extra mental overhead of "is this worth paying for? how much have i spent this month on reading?", people will simply stop clicking. Headlines are already super optimized to get you to click. The impact of a mental tax before every click would be at least -10x a good headline and seriously puts the media company at risk of bankrupt…

I disagree. Take Youtube as an example. A ton of mental overhead: videos padded for time, clickbait titles and thumbnails, in video promotions, reminder to check their patreon, reminder to like and subscribe, interruptions for Google ads, etc, . All this adds up and makes you question if the time waste was worth the chance at maybe getting to view some decent content. A system where you are throwing a penny at somebo…

Not if you use SponsorBlock. Been using it for months, it greatly improves the youtube experience.

Re: Ask HN: Why aren't micropayments a thing?

#134

Earlier quoted context omitted.

That's also so they can deny refunds for cash balances — once you pay money to their company, you may never receive it back under any circumstances. That way they can 'refund' you games at any time, but not ever have to record a cash transaction to do so. This is, not coincidentally, universal among online video game and microtransaction stores, with the singular exception of Apple who does not compel all purchases t…

Steam only requires the Steam Wallet for microtransactions. Games and DLC are usually bought "directly". Refunds go to the original payment method, unless you explicitly request that it should go to the wallet. > with the singular exception of Apple who does not compel all purchases through an intermediate currency balance. Google Play doesn't have one either, FWIW.

Oh! That's news. Thanks for the heads up, I didn't know that about Steam.

Re: Ask HN: Why aren't micropayments a thing?

#135
post #114

People are mentioning technical & payment processing hurdles, but those are all easy to figure out. Look at the gaming industry, mobile app stores, iTunes, online gambling, toll booths, tipping on various online platforms. Micropayments are most definitely already a thing, and have been for a while. A better version of your question is – why do newspapers charge for a monthly subscription instead of a per-article fee…

At the gaming industry, noone i know of that plays chess has implemented this. At Lichess there millions and billions of games played each month and they don't pay with micropayments for each game. Other chess websites charge monthly fee.

Micropayments are a hassle for any system that has people, actual human organisms, being responsible for a gazillion of small transactions. The involvement of a human increases the cost of each money transaction. Only for detecting and resolving fraud a human needs to spend minutes and hours of his life, his boss has to pay him at the end of the day, and that cost bubbles up to the consumer. Minimum fees have be to many cents or dollars for each transaction, so the micropayment starts to not being a micropayment, it starts to seem very much like a payment.

The only solution to that, is a fully automated money transfer mechanism, an immutable public ledger with all the pseudonymous transactions, i.e. bitcoin. The miner network ensures the validity of the transactions, that no malicious actor in the whole network change one bit of a transaction to his benefit. Humans can do that, have done that for centuries in the banking system, by hiring trusted employees, and by following protocols to ensure the validity of each transaction, papers with stamps and all of that.

Micropayments can help for a person to change a light in the street, and charging all the residents around, a thousand of them, for 1 cent each. 10 dollars he will receive in total, 5 dollars for his work, 5 for the light bulb, and he will be paid the minute the work is done. No need to give a corrupt politician 10 million dollars, for all the work in his municipality, and the politician afterwards he will pay the technician for the fixing of the light. That creates a honey pot ready to be exploited. Micropayments can make that honeypot disappear.

https://www.youtube.com/watch?v=V1Ef6I7R0zY

Re: Ask HN: Why aren't micropayments a thing?

#136
post #114

People are mentioning technical & payment processing hurdles, but those are all easy to figure out. Look at the gaming industry, mobile app stores, iTunes, online gambling, toll booths, tipping on various online platforms. Micropayments are most definitely already a thing, and have been for a while. A better version of your question is – why do newspapers charge for a monthly subscription instead of a per-article fee…

At the gaming industry, noone i know of that plays chess has implemented this. At Lichess there millions and billions of games played each month and they don't pay with micropayments for each game. Other chess websites charge monthly fee. Micropayments are a hassle for any system that has people, actual human organisms, being responsible for a gazillion of small transactions. The involvement of a human increases the…

The common solution to the flat-cost-per-transaction problem is to use not-money. Do microtransactions with company script, and buy the script in bulk units (eg 100 NYT coins for $5)

Which is generally how games do it

Re: Ask HN: Why aren't micropayments a thing?

#137
post #136

Earlier quoted context omitted.

At the gaming industry, noone i know of that plays chess has implemented this. At Lichess there millions and billions of games played each month and they don't pay with micropayments for each game. Other chess websites charge monthly fee. Micropayments are a hassle for any system that has people, actual human organisms, being responsible for a gazillion of small transactions. The involvement of a human increases the…

The common solution to the flat-cost-per-transaction problem is to use not-money. Do microtransactions with company script, and buy the script in bulk units (eg 100 NYT coins for $5) Which is generally how games do it

Yeah of course, but that's and IOU, it is not a micropayment. Transaction means that the money/tokens are transferred right away. In the example i gave with the light technician happens the same thing. He completes his work and it is the promise of the state that he will be paid at some time in the future. That's called IOU not a payment transaction. It is the promise given only, albeit by a big company we trust, or a state we trust. Or we don't.

Re: Ask HN: Why aren't micropayments a thing?

#138
post #26

Earlier quoted context omitted.

Everyone hates paywalls

Yes, because they want you to pay for a monthly or yearly subscription and you just want to read one article and maybe never come back to their site. But if I can do a 1-click "pay 1/2 cent" to read the rest of the article that would be totally fair

If the alternative to a x% chance of upselling someoone to a yearly subscription is "read one article and maybe never come back to their site" then the price that the vendor will want to charge for that article is x% of that yearly subscription. You mention 1/2 a cent in multiple comments, but that's not a realistic expectation - if the paywalled sites would offer a per-article payment, they would definitely want to charge much more than that for that single article, closer to a dollar or so. They don't offer per-article pricing because the currently paywalled sites can earn more otherwise - the micropayment challenges aren't relevant, they will not sell their goods so cheaply (as it would devalue and 'cannibalize' their main revenue) even if there was a zero-fee micropayment mechanism.

Half a cent per article is a plausible target for all the weak/cheap sources who can't possibly afford to put up a paywall right now because nobody would pay. It's not going to be used by the currently paywalled sites, their business model relies on getting a not-micro amount from each customer.

Re: Ask HN: Why aren't micropayments a thing?

#139
post #4

Processing a credit card costs $0.02 per card, plus interchange of up to 3%. Debit processing is $0.22 cents plus 0.05%. Both of these are the baseline cost, your merchant processor often won't be able to even get these rates for their own wholesale rates. Now try and build a micropayments ecosystem ontop of this infrastructure that is very expensive to interact with (in the context of $0.01 charges). Amazon can do i…

Other companies also do aggregate payments (I assume for the same reason). If you buy several things from Apple (apps, subscriptions, or other things) you'll get a single charge 1 or 2 weeks later with all of your purchases.

Re: Ask HN: Why aren't micropayments a thing?

#140
post #136

Earlier quoted context omitted.

The common solution to the flat-cost-per-transaction problem is to use not-money. Do microtransactions with company script, and buy the script in bulk units (eg 100 NYT coins for $5) Which is generally how games do it

Yeah of course, but that's and IOU, it is not a micropayment. Transaction means that the money/tokens are transferred right away. In the example i gave with the light technician happens the same thing. He completes his work and it is the promise of the state that he will be paid at some time in the future. That's called IOU not a payment transaction. It is the promise given only, albeit by a big company we trust, or…

> Yeah of course, but that's and IOU, it is not a micropayment

If I pay for something with a credit card, that's a payment transaction. It also involves (a whole chain of) IOUs.

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