
Can Tipjoy Make Micropayments Into Megabucks? - echair
http://www.pberg.com/blog/2008/12/28/can-tipjoy-make-micropayments-into-megabucks/
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amix
I think a much bigger player (for example PayPal, Google or Amazon) will step
up and do micropayments - simply because they have millions of users, money
and connections. I think it's pretty hard for a startup to succeed in this
market. [Amazon for example has already FPS (<http://aws.amazon.com/fps/)>].

Another thing is tipjoy's design, I think it's really bad for a money related
site. The design needs more authority (blue colors for example) and not look
like something from a cartoon.

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ivankirigin
The cartoon is cute, but you might be right about the authority issue. We'll
see how it evolves. We've already gone from mascot to abstract logo to
redesigned mascot in under a year. I'm sure that will happen again.

Amazon and PayPal already do micropayments. Why don't you know about them?
Because their payment mechanisms are more painful than microcontent is
valuable. An 8 step paypal checkout is braindead for $0.25 content. We're
working on mandated payment options and a merchant API to use our 1 click
micropayment system for selling content.

The social nature can't be overstated as well. Other payment processors really
don't pay attention to that. We try to push the data where we can, and in
cases like Twitter, actually allow the broadcasting platform to be the signal
to make a payment.

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tdavis
I hope they can turn it into Megabucks; I need Ivan to have poker money to
lose ;)

I've always thought the whole "promise to pay" thing was a bit of a double-
edged sword. On the one hand, you're relying on the honesty and follow-through
of people to actually pay their promised debt. But on the other hand, it is
awesome that you can pay/receive without having an account linked to some sort
of payment method and all the other hurdles that a tipping service would
usually have. Plus, the ability to "cash out" at any time helps skirt the fact
that micropayments are still very uneconomical due to fees. I don't know their
statistics, but I imagine a vast majority of people only pay / cash out after
they have at least a few bucks accrued.

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ivankirigin
For content with zero marginal cost that is easily pirated, the pledge model
makes lots of sense. I'm certain we have a higher payment rate than iTunes has
for music - IF you count those that pirate music. What was it? 2% of music on
ipods is bought via iTunes?

We're going to be making mandating payment easier soon. Then we'll have a
super powerful triple edged sword. Or something like that.

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tdavis
Yeah, I complete agree with that. I'm probably one of 5 people who still pay
for music.

Additionally, I would like to purchase one of these mystical triple-edged
swords, when available...

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ivankirigin
Louis CK on double edged swords <http://www.youtube.com/watch?v=zv8d_ry-
u-Q#t=0m50s>

I actually spend a lot of money (relatively) on RockBand.

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mynameishere
The various online newspapers and magazines need to get together in a cartel-
style fashion and just force a micropayment system. Just charge one miserable
penny to a view an article. Once it gets going, it would work.

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ivankirigin
That kind of slicing might not be a good idea. People don't calculate value
that well. Clay Shirky has interesting ideas on this:
<http://www.shirky.com/writings/fame_vs_fortune.html>

I think he has an overly narrow definition of micropayments though. Mandating
$0.25 for an article isn't the only way to make a micropayment. RockBand,
iTunes, MapleStory, etc. are all excellent examples of micropayment platforms
working today.

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lionheart
Micropayments have been tried again and again, and for some reason they never
work. I have no idea why.

Lets hope that it works this time. If it becomes popular, this site will be
incredibly useful.

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axod
The recent article on customer behavior is quite relevant. Can't quite
remember which it was on here, but it was saying how "magic" free is.
Micropayments are just a massive hurdle for users. Most will fall at that
hurdle if presented with it.

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axod
Seems to me the correct place to do micropayments, is ISPs. They already have
a billing relationship with the customer.

It would be as easy as installing an iPhone app, but for the web. Come on
ISPs, sort it out.

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ajkirwin
I don't like it. Case in point, I have "$168" in my tipjoy from people who
have "promised". But only $11 has actually been followed through on.

But if you look up the public information, what does it say? $168. It'd be
very easy to make it look like random people were getting MASSIVE donations
just by.. promising a whole lot and then not delivering.

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ivankirigin
All our rankings are based on followed through donations. We bug people to
pay, and cancel large donations after a fair amount of time has passed. We
don't allow for really large donations without pre-paid accounts.

The alternative to a pledge first model is asking for a credit card before any
pledges are made (or something similar). That's lame for donations.

~~~
ajkirwin
I should point out to you that for myself and probably for a few others at
least, we don't much care about the rankings.

We care about the tips!

