Tuesday, October 16, 2007

Is Attention the alternative to Micropayments?What about Amazon?

Several attempts at micropayment systems with cute names like bitPass have come and passed without gaining traction. The problem is Ads - I can pay a site less than a few cents by simply visiting their page - in other words, my attention is now converted into dollars (paid for by the advertiser). In this context, it is interesting to see Amazon launch their payment solution with web services interfaces.

The Amazon FPS has some unique new capabilities including ability to deal with very small transactions. Another interesting feature is support for setting up rules. Here is what Amazon says about the FPS (Flexible Payment System)

Micro-Payments Support: With Amazon FPS you can track and aggregate micro-payments (e.g. payments less than $0.50 or even $0.01) into a single payment transaction and can charge the customer before (prepaid) or after (postpaid) the service is provided. This features lets you minimize transaction processing costs and avoid having to build complex ledger functionality into your applications.

Inexpensive: Amazon FPS passes on to you the benefits of lower processing costs on bank account debits and Amazon Payments balance transfers. FPS charges less when the actual cost to process a payment is lower, rather than charging the same fixed fee for all payment methods. There is no up-front investment or monthly payment for running an application using the service. In addition, you can build and test an application for free using the Amazon FPS sandbox.

We may not be willing to pay for things like access to web content (NYTimes just shut down its TimesSelect paid portal and made the content free) but there are transactions that cannot be supported by ads. For example, if I wanted to provide a service that automatically provided you an update on the weather in Menlo Park - today there is no way for me to charge you 1c (or a fraction) for each update. Users could be paid for uploading pictures to certain sites; For reporting bugs; Even participating in polls; etc.

I think there is a lot of potential here. I will follow the Amazon FPS and keep you posted. Let me know your comments and feedback.

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