Micropayments are Crap

[Stephan Vladimir Bugaj]

As far as I'm concerned Micropayments as appealing to me as Data Mining.  I
certainly see how my wallet would benefits from being on the receiving end of
the money and/or information, but I can also clearly see the detrements of
being the one whose money and information was "automagically" being
appropriated. The technical concerns are many, any secure system can be
broken by someone with enough skill and resources, but the social concerns are
more difficult to address. For example, it's great if the browser logs
client side transactions that can't be spoofed because the wallet knows where
it sent money, but try convincing a vendor who is already suspicious of
'all this computer stuff' that you really sent them some money and a savvy
hacker pilfered it all - log or no log.

Setting a micropayment enabled web browser to automatically grant approval to
payments of $.02/action may seem reasonable, but it depends on what the vendor
has decided constitues an action.  If somone charged $.02/nanosecond for
retreiving shareware from an FTP library, and my browser was set to accept this
as reasonable based on the fact that it was $.02/action, I would have no idea
what an exhorbitant rate I was paying for access until my 'wallet' was emptied
by downloading the README file... this kind of rate swindling already goes on
in the telephone industry and would be even easier on a system like the
internet
where people habitually connect with unknown parties to check out the
offerings.
This doesn't happen with phones (well, not as much).  The virtual nomadness of
wandering the net leaves a lot of people - even otherwise careful people -
vulnerable to rate traps.

Micropayment proponents are incredibly fond of the proposition that software
could be leased on a usage time basis from a centralized server, and people
could also rent time on the servers' CPUs.  Sounds an awful lot like the
mainframe days to me.  I see plenty of ways in which this benefits the
vendor
(greater control over distribution, centrailzed revision/upgrade distribution,
greater profits over one-time sales, etc.), but no ways in which this benefits
the user.  Especially the power user.  I'm certainly not going to rent time
on a compiler or image editing program every single time I want to do some
work.
It took the industry long enough to get PCs and workstations to the speeds
they're at today so people could do their own work on their own machines to
go back to waiting in a queue for time on a centralized system so you can
have the honor of paying someone a lot of money to run your job.  As a
programmer, I can
see how I could make a fat chunk of change by bilking people through metered
software usage, but as a software consumer it seems like a rotten idea.  One
effect it would have, however, would be an exponential increase in the quality
and quantity of software available from the Free Software Foundation and
other similar groups as people like myself fled en-masse from commercial
software to a
system where we knew what we were getting into ahead of time.

The other rotten part of this idea, of course, is the irritating lag times
involved with trying to run distributed software (especially poorly
distributed
software, and especially on an overloaded network infrastructure).

Looking at micropayments from the (economically) conservative element
viewpoint within certain industries make them seem a lot less appealing, as
well.  Take television.  If people had to purchase every TV show they
watched, there would be a lot less TV production going on because there
wouldn't be as much random TV watching.   No matter how stupid you may
think your customers are, if you change their pay structure they think
about it - even if only briefly.  It would also be harder to sell TV
advertising, because if nobody was watching a show everyone would know
because this would be metered even better than current rating systems.  The
nature of the TV advertising industry would change because instead of the
archetypal/statistical sampling of Nielsen ratings, you'd know *exactly*
who was watching what.

Both micropayments and data mining require that the user give the vendor a
level of trust which most vendors are not willing to repay with similar
trust and customer satisfaction.  Customer-users are expected to give
vendors greater access to and control over their money and personal
information, yet at best they can expect the same poor customer service and
bureaucratic attitudes encountered when dealing with traditional
transaction processing companies and at worst can expect to be swindled out
of piles of money and/or have their
privacy violated as a matter of course.

Working where I do, everyone around me is on the side of the vendors - who
make up part of our client base.  On cypherpunks, of course, I'm largely
preaching to the converted.  There can be a middle ground, however the
middle ground that's been offered so far still leaves the consumer with the
sort end of the stick and
I'm not convinced they're ultimately what's best for business - especially if
you cling to seemingly outdated ideas like good customer relations, good
public/social relations, and long range growth relationships over short
term
profit pumping.


ttl
Stephan

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