Micropayments and Google - why not? - Webmaster General forum at WebmasterWorld

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Micropayments and Google - why not?

wolfadeus

8:47 am on Jul 21, 2009 (gmt 0)

Once every few years, some company seems to succeed in getting around the cardinal problem of the www: That small prices are not being paid, as transaction costs become relatively too high (don't get me started on paypal). One key to getting around this issue would be the reliance on aggregate payments, which work the better the more people and companies participate. From what I grasp, most "micropayment" start-ups died because they never got the critical mass.

So I wonder why Google has never embarked on that path. With the current amounts of money Google shifts back and forth all over the world, it could even issue its own, private currency if necessary - especially if linked to AdSense and AdWords. Any ideas why they havn't done that yet?

JS_Harris

9:39 am on Jul 21, 2009 (gmt 0)

Because they're an internet company, not a bank. The amount of energy it takes to maintain constant security, combined with the potentially huge liability, makes it hard to justify penny transactions. Critical mass isn't the only concern.

wolfadeus

10:15 am on Jul 21, 2009 (gmt 0)

Three arguments against your point:

1.) Most attempts to launch micropayment schemes were done by start-ups, not by major banks (but none went beyond "regional" significance).

2.) If Google gave anything about liabilities on a major scale, it would never have bought YouTube.

3.) Constant security is required for AdSense and AdWords, where is seems to be working well.

piatkow

8:29 am on Jul 22, 2009 (gmt 0)

I think that there are some quite frightening regulatory issues about getting into this field.

I looked into micropayments in detail quite a few years ago so I don't know what the market is like now although I know that at least two major companies later pulled out in the UK. Anything suitable for very small values required a large turnover by the recipient to cover flat rate monthly fees from the processor. I ended up with a local small payment processor whose charges were marginally less than PP and gave chargeback protection. There was no way that I could abandon cheques for transactions under GPB5