[Home]MicroTransaction

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A micro-transaction is one of the big ideas of TedNelson's XanaduProject. The idea is that users of the 'Net would be smoothly charged in very small increments (could be less than a penny) for content they consume.

Many people have tried to apply this to the Internet to much chagrin. The psychological friction cost of a transaction far exceeds a few pennies for content. That is, few people are willing to whip out their credit card to pay 10 cents. Further, the credit card transaction fees make it impractical to charge less than $1 USD per transaction. Only recently has AppleiTunes? proved that mainstream customers will pay < $1 for a single piece of content.

Wider support for microtransactions depends on reliable infrastructure that is adopted industry wide. The biggest attempt as of 2009 has been AmazonFlexiblePaymentsService? which supports microtransactions by either selling credits ahead of time that are then withdrawn from (e.g. a $10 pre-payment card), or by consolidating charges over a period of time and then charging all at once (e.g. a monthly phone bill). However, the service is still in its infancy.

Some jurisdictions have experimented with using mobile phones for micropayments as telephony customers are already used to consolidating many small transactions over a time period. Some early examples include [BT] link defunct and [Vodafone m-Pay], both of which collapsed during the dot.com bust.

Contributors: SunirShah, NathanielThurston, HelmutLeitner, FridemarPache

CategoryPayment


Conversation

FridemarPache: The author is pondering on another payment solution for small funds transfers, reducing the psychological frictions and even reducing the transaction costs to zero is sketched in <-> SocialDomaining. He thinks that it is possibly generalizable to other forms of Wikinomics based transactions.

SunirShah: Ok, sorry, I had to sleep on it to understand this. I'll reread SocialDomaining again.

FridemarPache: Thank you Sunir, no problem, we just see the concept and practise of SocialDomaining in its early experimental stage, so no wonder, when it may cause (hopefully debuggable, temporary) misunderstandings.

If we classify a funds transfer transaction below one dollar as micro- payment, when its total transaction cost is negligible, then take the example of 10 OLPC kids, who buy together a domain name for 80 cents each. The standard payment providers I know ask for a transaction fee, consisting of a fixed part of at least 35 cents plus a percentage part. This is not at all negligible ... and so no MicroTransaction.

A system of trust that accumulates tiny pledges can emulate MicroTransactions.

In analogy to the traditional FiatMoney? system, that creates debt based money, SocialDomaining can do something similar, including cost saving MicroTransactions. And the opportunity is now and here: I invite you or any other interested friendly and constructive CommunityMember to have e.g. the domain SocialDomaining.net transferred into your/their public domain portfolio for free = acquisition + transaction cost = 0 USD as a public transaction and negotiating in public the conditions and reflecting on it in the community.

The reason that acquisition and transaction cost sums up to zero is that you or the other friendly and constructive peers have it prepaid by your/their public contributions in the wiki or elsewhere. The idea of TrueAuthorCredit is worked upon in <->PredominantlyGiftEconomy, suggesting CategoryWikinomics to embed the topic into a living community context.

SunirShah: While I do not quite fully grasp SocialDomaining, although it does sound like a very cool practice, it seems that this approach side steps the idea of microtransactions by creating a wholly secondary economy, where money is only necessary at the border between the general economy and this special economy. Money only becomes relevant once the domain enters and exits this economy from and to the general economy. However, I may still misunderstand, since in the internal economy of the SocialDomaining communities there seem to be VirtualCurrency? which is exchanged, which actually suggests there are still macrotransactions taking place.

NathanielThurston: Sunir, it sounds like you do understand. The VirtualCurrency? could be similar to the currencies which have become commonplace in online role-playing games -- the first step is the development of a robust internal economy, inevitably followed by the creation of an interface (often black- or gray-market) between the internal special economy and the general economy.

FridemarPache: I remember from some forum postings of Google:NamePros that also MicroTransactions occur, e.g. if owners of some websites ask for USD cent equivalents (paid in NP$ as Google:Np+Dollars) to visit their external websites for leaving entries in guestbooks. Hey Sunir, Nathaniel, if I understand you right, we have no problem with understanding "understanding" :-).

SunirShah: An interesting discussion. I believe we are teasing out the idea of how VirtualCurrency? is a potential alternative solution to MicroTransactions, perhaps as a means to raise the perceived size of a transaction to the AnthropologicalLevel?. -- SunirShah

I'm also thinking along anthropological lines. The problem as I see it is to coin a kind of VirtualCurrency? which facilitates online social MicroTransactions. Criteria:

NathanielThurston: I'm imagining something a little like a BarnStar, but given as a routine part of ordinary social interaction, and backed by IndividualTimeAsCurrency. Anyone could "coin" an "hour of their time", to be used (only) by a friendly peer in (only) a constructive manner. The person who received the gift of time could either save it, use it, or pass it along with a note of thanks. The complete record of the way in which the "bank note" was given would be recorded along with the note itself, and might well become of far more interest and value than the original gift of raw time.

FridemarPache: Sunir, what do you understand under AnthropologicalLevel? ?

..:..

FromGettingAlongToFosterEachOther?

FridemarPache Metacommunication: Helmut, thank you for giving your explicit permission; but don't let us forget that there may be a lot of newcomers, who easily might imitate harsh tones. So why not cultivating a polite or even better a friendly (and this way to new participants also a more helpful) conversation. This page is DiiGo annotated. -- FridemarPache

HelmutLeitner [Metacommunication]: Fridemar, I think that wikis are reasonably friendly, compared to other systems. With respect to newcomers, I think the most important thing is to show and communicate, that wiki has a lot of freedom to accept multiple ways to communicate, that people are accepted in their individuality. So the example that you and me are very different in our personalities and communications, and still can get along, may be a more inspiring example than if we would adapt to each other and agree on some standard, for others to follow. I think wiki is a space for people to unfold, not to be taught.

FridemarPache Metacommunication: Helmut, I agree with your views of respect to newcomers, showing and communicating, multiple ways to communicate,accept individuality (, as far it is not harming others), a space to unfold, and partially on not to be taught. However I think in terms of social symmetry, that (implicit, not authoritarian) teaching plus learning from each other in unity as a common effort makes the wiki so valuable. But the most valuable thing to me is not only getting along, but to FosterEachOther, to help each other BarnRaising.

Fridemar, I agree with Helmut. Speaking for myself, I am happy to have you adopt teaching and learning mode, for those are the languages with which you are most comfortable; but please stop trying to persuade us all to join you.

fragments of possible use elsewhere

FridemarPache: Helmut, your allusion to some historical currency reminded me to Google:PepperCoin, which I inserted into your text, asking you permission. I also remember Google:MilliCent [1].

Discussion

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