December 2nd, 2003
An idea that seemingly evaporated along with dot-com mania is back: that the Internet would realize its full grass-roots potential if Web surfers could pay small amounts for tidbits of online content.
Several companies are again betting they can mine gold from ferrying around such "micropayments." Even credit card giant Visa USA is exploring the prospect. Boosters believe people could sell countless new creations on the Internet—from essays to advice—if only mechanisms existed to facilitate small payments. For authors of popular content, all those pennies would add up.
The problem, as things currently stand: transaction costs make most credit card sales under $1 all but pointless. By giving independent content providers an efficient way to collect money, micropayments could widen the Web's pool of things to see, hear and do, keeping the Internet from being dominated by media giants and other brand-name companies.
"We like to characterize ourselves as e-commerce for the rest of us," says Kurt Huang, co-founder of BitPass Inc., which carries small payments to 100 Web sites and plans to emerge from "beta" test mode in December. "What we're trying to do is enable diversity." Micropayment handlers know they're treading over the skeletons of 1990s companies—the likes of Flooz, Beenz, CyberCash and DigiCash—that tried and failed to create virtual currencies. Back then, some hoped Internet currencies would evolve to eventually be spent as anonymously as pocket change.
Today's micropayment advocates say earlier attempts failed not just because they were cumbersome and lacked sufficient government and financial industry support. People preferred what was familiar, namely credit cards. As well, bountiful advertising money and venture capital inflated the Web with so much free content in the late 1990s that there wasn't much point in charging 25 cents to view a comic strip.
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