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Options Besides PayPal For Micro Transactions?
Shoemoney says that there’s got to be a better way than PayPal for micro transactions. He’s right, there should be something, and I’m not talking about Google Checkout either. Shoe poses…
About once a week it seems me and David have a talk about micro payments on the web and a way to do them properly. Both of us agree it is a service badly needed but we also agree we do not want to do it =P. Right now if you want to send someone a small amount of money there just is no way to do it that makes much sense.
I am a huge fan of virtual “credits†or “pointsâ€. Basically people can cash in $10 or whatever the equiv currency would be and receive 1000 credits.. for fun lets just call them shoemoney dollars. Now people on their blogs or whatever could easily send money or “tip†other people for posts/content/whatever they like.
He goes on to use my ScratchBack.com as an example of why PayPal transaction fees well, suck. They do.
Some of you out there are like well you can do that now with things like scratchback right? Sure you can but its REALLY inefficient. Let me show you why. Just for instance I am going to use Shawn Collins blog affililate tip. As you can see I can send him $1 paypal to get a link on his blog via Scratchback:
Looking at the Paypal calculator Paypal is going to take 33% of the payment. So after Paypal takes there 1/3 of $1 and scratchback takes their 30% (I think that is their percentage but I could not find it on the site) That leaves like 40% some percent actually goes to Shawn Collins. Hrmmm
Actually, ScratchBack only takes 10% after PayPal fees Shoe. But back to the point.
What Show wants someone to build is a GREAT idea. However, I don’t think possible.
BUT lets say Scratchback allowed me to buy ehhh… lets call it SCRATCHBUCKS where it was even a even swap $10 = 10 scratch bucks… And I could distribute those scratchbucks at my leisure to people who have scratchback accounts.
There are simply too many global laws and money exchange issues, and plenty more things, that would make this type of system a HUGE endeavor.
But I like the idea. :O
Jim,
The problem with a Scratchbucks type solution would be the dollar value of an actual scratchbuck. You could try some sort of preloading program like you spoke of but the issue of where the bucks could actually be used becomes the problem. Remember Flooz?
Think of how frequent flyer programs work and that would be your best model to choose. The points are accrued and and you have a select marketplace to use them. If you don’t use them they expire (the airlines count on that) and if you look at the value of the goods in the frequent flyer catalog 3 billion miles gets you a plane ticket from A to B or a clock radio (cash value $6.99). Its never a 1 to 1 ratio of miles to dollar value.
I think trying to create a system like paypal for micropayments just isn’t in the best interest of the broker company and therefore no one is really persuing it.
I think the real solution would be to somehow be able to pool all your transactions and reconcile in one transaction at the end of say a week. This way you are hit only once with the transaction fees.
-s3
What about the Amazon Flexible Payments Service ?
I believe it was designed for this purpose.
Forget micro payments. All i want for Christmas is a Scratchback widget 160px or less in width. :-P
I kinda like the tip me idea.. first time i have seen it ..
Seems like you put a lot of thought into working out a suitable alternative to Paypal. Sounds like it could be workable.