Micropayments and probabilityI could have been kinder to the big brains at Peppercoin I’m sure but someone had to say it. This week’s Guardian column is about the latest brilliant but doomed micropayments scheme to hit the net ? based on an exotic and genuinely innovative probabilistic approach to settlement that promises to make tiny transactions profitable for merchants by… chucking most of them away. The proposition to merchants is (literally): “trust us. You’ll probably get your money in the end”. I don’t think they’re going to like it ? it has the entire history of innumeracy against it.
Some more links on this story:
Pretty good overview from The Boston Globe (via Werblog)
Clay Shirky on why micropayments won’t work
Very good slashdot thread on the topic.
http://slashdot.org/articles/03/03/15/1328203.shtml?tid=98
shows why this is all wrong…
Cashless is coming to meatspace… and cyberspace presumably after that…
I don’t buy this Indy. I think the fate of stored value and smart cards is distinct from that of micropayments, especially on the net. I’ll acknowledge that the exciting thing about all these new forms is their potential to create new players in payments, settlements etc. and to challenge entrenched methods, create new value for merchants, consumers, everyone… but the long view has to see the incumbents hang on to 90%+ of their current business. Visa will be as big in non-cash, stored value and micropayments as they are in conventional transactions. Ask me in ten years!