Mac Musings

Apple and Linux: We Need Each Other

Dan Knight - 2001.06.15

Napster may have found the wrong solution for their legal woes - but right solution still isn't at hand. Possibly the best solution for Napster and content-based Web sites is micropayments, something we've been hearing about for years.

The Big Problem with Micropayments

The problem with micropayments (payments under $1.00) are not insurmountable, but the biggest obstacle to date has been the cost of online transactions. The lowest cost general payment system in use is PayPal, which charges a fee of 30¢ per transaction plus an average of 2% of the total, or 32¢ of the first dollar. Under PayPal, a 32¢ transaction would net a site 1¢, while generating 31¢ form PayPal.

The Amazon Honor System does a bit better on the low end, charging just 15¢ per transaction plus 15% of the total. The smallest profitable transaction would be 19¢, again generating just a penny for the site with the link.

If we're going to use micropayments to support a site, we have to reduce the cost per transaction to a penny or less. (As Jakob Nielsen notes, "If a page is not worth a cent, then you should not download it in the first place.")

Other Problems with Micropayments

Perhaps the next biggest problem with micropayments is psychological. People have become used to downloading MP3 files and visiting Web sites for free. Publishers need to convince customers that their content is worth the price.

One way to do that would be the elimination of site ads. A typical site may have two or more ads on each page, each taking a few seconds to download. By eliminating those ads, we speed up the browsing experience and save the viewer time. Time is money. If you surf at work, the time it takes to load those ads costs your employer about 3¢ per ad (see Neilsen). Between banner, badge, and text ads, that might account to 5-10¢ per page viewed. A dime isn't a lot of money, but if it costs just a penny or two to view a page without those ads, we all save.

Another significant problem is currency. I operate on American dollars, which should not be confused with Canadian dollars, Australian dollars, British pounds, Dutch guilders, German marks, Euros, or any other currency. Since the Web is worldwide, any micropayment system must work internationally. Whether that means micropayments are based on U.S. dollars, Euros, or a newly created Internet currency (Microbits? WebCents? ePesos? InterPennies?), it has to be a system that residents of all nations can tap into.

Finally, we have to convince everyone to set up standards. The normal price for an MP3 might be US15¢, while a page view might cost a penny. And websites could provide free pages, such as their home page, in hopes of getting you to click deeper within the site to fee-based content.

The Micropayment Solution

There's already a standard markup system for micropayments, as well as a couple companies supporting that standard, but that doesn't seem to be going anywhere yet.

We need someone with the experience of Visa, MasterCard, American Express, PayPal, or international banking to create a viable micropayment solution - and it must be compatible with older computers, older browsers, older servers, and existing Web pages. It must also be relatively inexpensive so sites can turn a profit at a penny a page.

I imagine the system would work something like this:

  • Server software is set to assume site content costs a specific fee unless a page is otherwise flagged. Extra cost pages would also be flagged.
  • All transactions would be performed in a standard currency, which I'll call a microbit, such as 1/1000 of a Euro or 1/15¢ American (which is a convenient 1/10¢ Canadian, give or take a bit).
  • Payments would be handled via an electronic wallet. The user must have funds in that wallet to visit non-free pages. Payments would be made in whole microbits - no decimals.
  • Fees would be charged to sites that accept micropayments. It would be up to the companies offering electronic wallets just how they would handle things - a fixed fee per transaction, a fixed percentage, or (most likely) a flat fee plus a percentage.
  • Business accounts would either be managed on a decimal basis (1/10 or 1/100 microbit) to deal with overhead, or they would be charged their percentage once per day, week, or month in whole microbits.

That's the rough outline. Over the course of the week we'll look at the benefits of micropayments for the firm that makes it work, the consumer, and the online publisher, and then take a look at possible problems on Friday.

Join us on Facebook. Follow us on Twitter.

Dan Knight has been using Macs since 1986, sold Macs for several years, supported them for many more years, and has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.

Recent articles by Dan Knight

Links for the Day

Recent Content on Low End Mac

Recent Deals

About LEM Support Usage Privacy Contact

Low End Mac is an independent publication and has not been authorized, sponsored, or otherwise approved by Apple Inc. Entire Low End Mac website copyright ©1997-2012 by Cobweb Publishing, Inc. unless otherwise noted. All rights reserved. Apple, the Apple logo, Macintosh, iPad iPhone, iMac, iPod, MacBook, MagSafe, Mac Pro, Apple TV, and AirPort are registered trademarks of Apple Inc. Additional company and product names may be trademarks or registered trademarks and are hereby acknowledged.
  Advice is presented in good faith, but what works for one may not work for all. Please report errors to .
  LINKS: We allow and encourage links to any public page as long as the linked page does not appear within a frame that prevents bookmarking it.
  Email may be published at our discretion unless marked "not for publication"; email addresses will not be published without permission, and we will encrypt them in hopes of avoiding spammers. Letters may be edited for length, context, and to match house style.
  PRIVACY: We don't collect personal information unless you explicitly provide it. For more details, see our Terms of Use.

Custom Search

Share

Follow Low End Mac on Twitter
Join Low End Mac on Facebook

Low End Mac Reader Specials

Quantcast

TypeStyler 11 is now in the Mac App Store!! -- Special Introductory Price of $59.95!! -- To Buy From The Mac App Store Click Here Now!! Or buy direct from Strider Software.

Quantcast

Quantcast

Quantcast

Poker Mac Don't install Parallels to play poker online! Poker Mac will show you how to download and install a native Mac poker and Mac Casino applications in minutes.

Quantcast

Quantcast

Quantcast

Quantcast

Favorite Sites

MacSurfer
Cult of Mac
Shrine of Apple
MacInTouch
MyAppleMenu
InfoMac
The Mac Observer
Accelerate Your Mac
RetroMacCast
PB Central
MacWindows
The Vintage Mac Museum
DealMac
Deal Brothers
Mac2Sell
Mac Driver Museum
JAG's House
System 6 Heaven
System 7 Today
the pickle's Low-End Mac FAQ

Affiliates

Amazon.com
The Apple Store
The iTunes Store
PC Connection Express
GainSaver
Parallels Desktop for Mac
eBay

Low End Mac's Amazon.com store

Advertise

All of our advertising is handled by BackBeat Media. For price quotes and advertising information, please contact at BackBeat Media (646-546-5194). This number is for advertising only.

Open Link