[Dave Birch] Remember last year when the founder of Netscape, Marc Andreessen, said at a Wired conference that

“We should have built payments in the browser,”

The statement was made in response to an audience question about magazines’ future as an industry. Chris Anderson, Wired‘s editor-in-chief, held up his iPad. “The tablet has been the first media platform that came with an ecommerce engine attached. The big problem with the web is that we couldn’t take payments,” he said.

[From Netscape Founder: We Should Have Built Payments in the Browser]

Well, not for much longer, apparently.

Mozilla is hoping to streamline payments for web apps by adding a new API into its forthcoming Firefox OS that makes the process easier and more secure. It announced the first draft of a new payment system API which will be integrated into Firefox OS with the aim of making payment processing simpler and provide better security and control for users.

[From Mozilla tests out web payment API for Firefox OS | ZDNet]

Right now, app developers have to call different functions depending on the OS (e.g., the IOS in-app billing API) so this should make life easier for them but it won’t cause an instant revolution. The idea is to add a standard “pay” function in the browser, but all that function will do is send you to the payment mechanisms that are configured into the OS. These will, in the first instance, be payments cards and (for some mobile OS) carrier billing. How the online retailers are to connect with the payment providers is not yet specified as part of the API but may be in the future.

Browser micro payments were one of the very first areas for what are now called emerging payment technologies. I can remember looking at all sorts of possibilities for a variety of different clients back in the early days of the web. It was assumed (and I thought it was the case) that if anyone could get a simple micropayment system working then it would transform the web. I remember writing an article for a now long-extinct Microsoft magazine called something like “The Red Button” putting forward this case and I subsequently wrote a piece for the Guardian about it. What if, I was wondering, there was a red button on your keyboard that would pay the operator of whichever website you were looking t 10p when you pressed it. How would that change the dynamics of content?

Suppose that every PC, personal digital assistant, mobile phone, interactive television and other information appliance came with a red button on it marked “pay the guy”.

[From When red could be Orange | Technology | The Guardian]

We never found out. Lots of people tried to build such systems, but they never got traction. Who remembers Hashcash? Millicent? Cybercoin? Beenz? DigiCash? Barclaycoin? (I do, obviously!) So why didn’t they take off? Surely the economic pressure to come up with suitable micropayment solution would be so great as to align interests. Not for all content (the revealed preference of consumers for music and movies is for uncapped subscriptions) but certainly as a platform for new kinds of commerce.

“It was essentially impossible to do,” Andreessen replied. “We tried. We talked to credit card companies, banks, we weren’t able to do it. Microsoft wasn’t able to do it.”

[From Netscape Founder: We Should Have Built Payments in the Browser]

I loved Millicent, for example: the cursor changed to a $ sign went you pointed at a paid link, and when you clicked on the link the service provider was paid automatically. Great idea. And fifteen years ago, when Compaq bought Digital (who had developed Millicent) they thought so to.

Compaq is planning to use Digital’s Millicent micropayment technology to offer incentives for perusing its site’s ads. 44 Browsers can receive small digital payments each time they visited a new advertiser’s site. These in turn can be used to pay for services on other partner sights.

[From Micropayments and the Future of the Web]

Well, Millicent went the way of all flesh and i still can’t buy an old magazine article or a bit of shareware but just clicking on it. Yet I remain convinced that there may be a way forward on this and perhaps the Mozilla API will stimulate more thought and perhaps make for a sea change in web economics. Four years ago, I wrote in the Journal of E-Finance & Payments Law and Policy (Volume 3, Number 2, February 2009, pages 11-13) that

the technological determinist in me is drawn to another much simpler and more straightforward explanation: people won’t pay $1 for stuff on the Internet because they can’t, whereas they will spend $1 for a ringtone on their phone because they can.

I think this dynamic is now clear. Give people an easy way to pay for something (e.g., iTunes) and by and large they will. Is the new Mozilla payment API that easy way to pay? No, it isn’t. But it might be a simple way to use that easy way pay once we’ve found it.

These are personal opinions and should not be misunderstood as representing the opinions of 
Consult Hyperion or any of its clients or suppliers

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