Business

Shouldn’t We All Have Seamless Micropayments By Now?

The web’s founders fully expected some form of digital payment to be integral to its functioning. But nearly three decades later, we're still waiting.
illustration of two coins floating in the sky above a city.
Alvaro Dominguez

Back in the 1990s, when Tim Berners-Lee and his team were creating the infrastructure of the World Wide Web, they made a list of the error codes that would pop up when something went wrong. You’ve surely encountered many of them: “404 Not Found,” which pops up if you click on a dead link; “401 Unauthorized” when you hit a page that needs a password; and so on.

Here’s one you probably haven’t seen—and its absence from your life speaks to why the promise of the early web seems increasingly out of reach: “402 Payment Required.”

That’s right: The web’s founders fully expected some form of digital payment to be integral to its functioning, just as integral as links, web pages, and passwords. After all, without a way to quickly and smoothly exchange money, how would a new economy be able to flourish online? Of course there ought to be a way to integrate digital cash into browsing and other activities. Of course.

Yet after almost three decades, that 402 error code is still “reserved for future use.” So I still have to ask: Where are my digital micropayments? Where are those frictionless, integrated ways of exchanging money online—cryptographically protected to allow commerce but not surveillance?

I don’t really want a flying car, but I do want to be able to shed pennies (and fractions of pennies) as I browse news or read fiction online. I want to easily support artists and writers without having to set up an account, create a password, fork over my credit card details, and commit to an ­ongoing­ relationship that involves receiving a new piece of spammish email at least once a week.

What would such a system look like? It would be as seamless as browsing itself. It could have an automatic mode (a news subscription consortium, for instance, could silently disperse payments to individual publications as I read articles from members) or a one-click mode. (Stumble across a nice poem on some unfamiliar site? A small green button on your browser lights up, and you can make a one-time contribution.) And, much as Apple Pay already does now, vendors wouldn’t necessarily get your account information, just a cryptographic payment token that’s good for exchange or verification.

Of course, we already make payments online all the time, but under current conditions, frankly, it sucks to do so. If you buy things directly from small vendors, you’re stuck entering your credit card information, your email, and your billing address on site after site—sinking ever deeper into the surveillance economy as each digital form puts your personal details into someone else’s database, while also giving hackers ever more opportunities to filch your data.

Given how terrible this is, many of us opt for the convenience of “one-click” setups, which allow you to enter your information once into a large company’s database, and then they facilitate future purchases from a wide array of merchants. No wonder the ecommerce landscape is so hypercentralized, dominated by giants like Amazon and eBay.

Another thing that happens in the absence of a digital-native micropayment system? Content creators have to rely on advertising to support themselves. This, too, is a losing game for all but the biggest players. Even the apparent winners of the digital ad economy—Facebook and YouTube—must operate at vast scale, engage in copious surveillance, and subject their systems to minimal human oversight to make ad financing work. Content creators are left chasing eyeballs and fractions of ad dollars on these giant platforms, whose business model favors virality, misinformation, and outrage. As if all that weren’t bad enough, intrusive and bloated layers of ad tech slow down the internet and serve as potential vectors for malware. Plus the online ad business is rife with click fraud; the whole thing may be a house of cards.

When you think about it, the lack of a seamless micropayment system is a central flaw in today’s internet, one that props up all sorts of wrongs. It also precludes a host of possible business models and innovations. Imagine a world where you could walk around a new town and, for a small fee, interact with an augmented-­reality system that offers audio guides and other tidbits of information. That’s the kind of business idea that might take off if digital payments were frictionless. But it’s doomed to fail in a world where you have to pause and enter your credit card information yet again to sign up.

For all the talk of disruption, today’s internet is still young and hugely underinnovated. While it’s difficult to predict all the details—that’s the point of disruption!—I have little doubt that it’s technically possible to build a digital infrastructure that rewards creativity at many scales and protects our privacy. Bitcoin is not the answer, for a variety of reasons, but a blockchain scheme, along with a mixture of more conventional systems and cryptographic tools, might play a part. Whatever the solution is, we just need a combination of vision, smart regulation, and true innovation to advance it.

Right now, we’re stuck where the automobile industry was when cars were still “horseless carriages,” wagon-wheeled monstrosities with high centers of gravity and buggy seats. We’re still letting an older technology—credit cards, designed for in-­person transactions, with high fees and financial surveillance baked in—determine the shape of a new technological paradigm. As a result, that paradigm has become twisted and monopolized by its biggest players. This is one of the modern internet’s greatest errors; it’s past time that we encounter “402 Payment Required” for real.

Photo collage source: Shutterstock (coins), iStock (city)

Zeynep Tufekci (@zeynep) is a WIRED contributor and a professor at UNC Chapel Hill.

This article appears in the February issue. Subscribe now.

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