> I think for the system to work, it would have to be
> tied into the user's ISP bill. Works like:
> 1.User clicks on a link
> 2.Popup says "You will be charged $0.15 to access this
> site for one month, starting today"
> 3.User agrees
> 4.Charge is added to his ISP bill (ISP receives some
> sort of payment for hosting the charge) ...
Gasp! This is a classic hardwired payment scheme. I suggest instead
that the user should have some abstraction layer between himself and
any settlement agent. Nobody is so stupid they will buy into some new
network scheme that is hardwired to any particular settlement bank.
Here is how intercompany settlement works.
2. popup asks for 15 cents to be sent to an email address.
4. user clicks a stupid little icon on the bottom of the window that
writes an XML journal entry into the message which says,
"debit expense 15c, credit accounts payable 15c" and sends it
to the seller.
5. the icon posts my GL with an AP Seller. Now another transaction
is sent to my settlement agent, which could just as easily be
a kid down the block or Citibank. The key is, I have a choice:
" debit the seller 15cents credit my deposit account 15 cents "
(I am stating this in my debit/credit context not the banks.)
6. It's posted by my GL and the settlement agents' GL. The settlement
agent dutifully gives credit to the Seller's account if he's using
the same settlement agent. Otherwise the settlement agent posts
it to a mutual settlement agent indicated in that original URI. Or
as a last resort, sends it off as a real bank transfer.
7. The seller's settlement agent eventually gets the same kind of
journal entry "credit seller debit settlement agent" and it then
flows to the seller, "credit buyer debit your deposit account".
He flows the entry into his accounting system. Or most likely,
the "Seller" is a webstorefront operator and it flows the same
accounting entry downstream to the owner of the website's acctg.
8. the website understands it has gotten the money so it
gives you the goods.
9. Over time, the DNA arranges itself to avoid the punitive round
trips to banks. Reputation mechanisms and insurers etc. etc.
This is a thumbnail sketch of how intercompany journal entries work
in large corporations. What you are doing is a balance sheet transfer
of value. It sounds complicated but it is a snap. Anyway this
would all be shielded from the user. Note I am *not* addressing
security--a separate matter that drops out of the equation regardless
of the mechanism of payment. What I am addressing is the crippling
inconvenience of banks, and the slaughterhouse of fees when you
round-trip money in/out of banks. These are what killed the last
generation of cyber cash companies.
Remember, a bank is nothing but a GL. Well, a crippled little
excuse for a GL, having no interfaces and only one account, and
a shredder to strip away any XML or data integration at the front
If they weren't a protected monopoly, banks would have been laughed
out of the market long ago.
Intercompany journal entries works in any agent, device, router,
software, cellphone, Quickbooks, Peachtree, and every accounting
or ERP or ecommerce system ever devised, they're all ready to
rock n roll with double entry accounting. (in the background I hope!)
Why are we screwin' around with banks? Beats me.
> The failure of micropayments on the web was due, IMHO, to credit cards
> being workable. There was an easy evolutionary path that reduced the
> need for new infrastructure. We can't use credit cards with P2P in
> the exact same way as with the web, because getting paid would require
> users to open merchant accounts. But so what? You cash in and out
> with denominations that make sense on a credit card, and in the
> meantime transactions are aggregated at PayPal, or your ISP, or
> whoever holds the merchant account.
Noooo. You leave the money in the bank, and create information
systems that point to it, just like traditional money pointed to
gold. Forget the credit cards and Paypal which are just another
facade for the banks. They kill your economics because they break
everybody's automation by stripping away data, and, loading the
gol darn fsCKing fees on every dang thing you try to do. They are
Just leave your money in the bank and pledge it to some escrow or
settlement agent. Nobody has any risk or extends any loans or credit.
Systems will emerge that adjust for interest and all that.
Clay Shirky said,
> By this logic, PayPal should be micropayment central. We have all the
> infrastructure we need, we just don't have any demand
Wrong. Paypal cannot be micropayment central because it's part of a
bank and doesn't want to compete with banks. Furthermore it's all
by itself with no data interface yet. The Quickbooks webledger is
integrating with Paypal so you will expect, it will begin handling
smaller and smaller payments efficiently, steered thru the webledger
users' interface. But guess what: Intuit and the Banks have no
intention of doing anything stupid that destroys anybody's pricing
structure. So you already know what will be the result.
> Watch Deutsch Telecom and Nokia. Both are making huge plays in the
> "You don't need a credit card, you can just bill it back to your phone
> bill" plays.
Yes. They are also working on MeT. Some companies are pressing them
to implement OMG GL in the phones; here is a little snack,
Oliver Willis said,
> hey, anyone out there want to turn (ISP settlement) into a real
> business? :)
Oliver--it's already out there, http://www.ipin.com/
and moved on. http://www.trivnet.com/
does it and they're moving
on, too. There is a whole longrunning Internet Billing list on
which has been a very tedious and depressing list, the last
couple of years,
Note: this is not legal advice. This is an internet discussion forum.