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Pursuing the elusive micropayment

In 1989, Brewster Kahle introduced his Wide Area Information Server Concepts. In many ways the web is now being used in ways that Brewster was suggesting for WAIS. Included in his suggestions were issues of how people would get paid for the content they put online.

Today, people are still working on different ways to get paid online. You can download music online complete with digital rights management for a buck from various sites, if you sign up ahead of time. You can subscribe to various newspapers online. Yet the problem of micropayments still hasn’t really be solved.

In Second Life, characters have money in the online currency, the Linden Dollar. A Linden is worth between a third and a half of a cent. I’m currently earning about fifteen Linden’s a day right now and if I got to an online concert or a fundraiser, I’ll throw a few Linden’s in the tip jar. Second Life has a workable micropayment system. It would be interesting to see if this could be incorporated into websites. If you are on Second Life and like what I’m writing, please consider giving me a few Linden.

Another interesting approach is using cell phones for payments, including Micropayments. Last summer, CNN ran an article about sending money via cell phones.

They mentioned Paypal Mobile. If you use PayPal, you can set up your phone to allow you to send money from your PayPal account to other users of Paypal Mobile. With Paypal, you set up your mobile account and a PIN. If you want to pay someone, you send a text message to PAYPAL (729725) in the format
send amt to phone
e.g.
send 0.15 to 2032176712
That would send me fifteen cents. When you send a message like that, Paypal automatically calls the cellphone asking that you enter the PIN to confirm.

Obopay works pretty much the same way, except that you include your PIN in the message. If you are using OBOPAY, you send a text message to OBPAY (62729) in the format
send PIN# phone amount comment
e.g.
send 1234 2032176712 0.15 I like your website
would send me fifteen cents and the message ‘I like your website’, if your PIN is 1234.

TextPayMe works pretty much the same way. However, they use an SMTP gateway. So instead of sending a text message to an SMS shortcode, the way PayPal or OBOPAY do, you send it to sms@textpayme.com
The format is
pay amount phonenumber
e.g.
pay 1 2032176712
Like with Paypal, you then receive a phone call asking you to enter your PIN to confirm the payment. The example doesn’t talk about sending cents, but I suspect it works. In the example above, you would send me a dollar. With textpayme, you can select an option to not require pin confirmation for transfers of $15 or under.

It is worth noting that both OBOPAY and textpayme are offering promotions, giving you $5 for signing up and/or for recruiting friends. So, if you sign up for textpayme using the button below, I get five bucks from it.


SignUp at TextPayMe

The problem with these systems is similar to problems with other attempts at micropayments. They require setting up accounts ahead of time, having everyone using the same system and they remain slow and cumbersome. You can’t simply click on a link to hand someone a quarter. However, you can pay for things with your cellphone when you are out and about.

Two recent articles talk about this. This press release talks about how in New Orleans, revelers will be able to contribute to the rebuilding of the city by texting donations via PayPal Mobile. It does raise the issue of texting while drunk, but I hope that the city of New Orleans raises money through this.

Also, Finextra is reporting an effort by MasterCard in Taiwan to use cellphones for contactless payments. The approach is a little different, and not available in the States, but may be an indication of some of the direction payments are going.

So, while micropayments and contactless payments may not be perfect yet, they are continuing to evolve and these changes will have significant affects on the way companies do business. They also open up a whole new venue for scams.

As always any feedback on this or other articles are appreciated, especially if it results in money being given to me in SecondLife or texted to one of my cellphone accounts.