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Author Topic: Flattr: New Micropayment System - Gets the Model Right?  (Read 9296 times)
mouser
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« on: February 10, 2010, 05:29:01 PM »

Flattr is a new micropayment system that is still in early beta stage.  I have no idea if it will survive -- i think that will be determined by many factors that have nothing to do with the quality of the idea or implementation, and more to do with marketing and business.

But this is the first implementation of an idea i wrote about a couple of years ago on DC as an idea for paying for unlimited music downloads (and i'm sure others have as well).

The idea is that users pay some flat fee into their central account, and then whenever they want to support a site or some content producer on the web, they simply click a button on that web page (or download a song, etc.).

Then at the end of the month, your flat monthly fee is divided up among all of the places you chose to support that month.

So if you pay $10 a month into your account, and clicked to support 10 people that month, each would get $1.  If you only supported 2 people, they would each get $5.

To me this is EXACTLY the right model for a donation-based voluntary support system.  It lets people decide how much they can afford to give, and makes it super easy (even fun) for them to divide up their gifts.

I really hope something like this takes off -- if not Flattr then someone else.  It breaks my heart that the real companies that could make this work because of their reach in the market (like Google) wouldn't go near it with a 10 foot pole since it would have such a negative impact on their business model..  And i worry that the ad companies like google are going to be actively trying to prevent something like this from taking hold.

Anyway, go Flattr!  thumbs up

EDIT April 2nd, 2010: As more details emerge of the Flattr.com plan, there are some things i'm not thrilled with.  According to their FAQ: when you set a monthly amount, it will be taken from your account even if you don't click to flattr anyone in a given month and "given to charity"; this strikes me as wrong -- it should stay in your account.  And secondly, flattr plans to take 10% of all money you put into it -- i think that's too high.
 


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« Last Edit: April 01, 2010, 10:25:36 PM by mouser » Logged
superboyac
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« Reply #1 on: February 10, 2010, 05:35:59 PM »

That is a good idea.  Very low stress to the end user.
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TheQwerty
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« Reply #2 on: February 10, 2010, 07:00:06 PM »

Seems like a good idea, but I'm really getting frustrated with all these sites and services that rely on videos to explain everything.  If you are going to force me to watch a video to understand anything at all about your product, I've already lost all interest.

Also, what happens if you don't click to support anyone in the month? Does your money just go to them then or does your support mean even more the next month?
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zridling
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« Reply #3 on: February 10, 2010, 10:07:54 PM »

It's so simple it's brilliant. And one could easily determine the monthly amount depending on their personal budget without fear of overspending.
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mouser
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« Reply #4 on: February 10, 2010, 10:15:56 PM »

We should point out the Kachingle is also trying a similar approach: http://www.kachingle.com/
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justice
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« Reply #5 on: February 11, 2010, 05:24:54 AM »

Ah I was wondering if there was a thread on this, I'm monitoring the page for changes and applied for a beta test. Wondering how if they make money or if one of the 'slices' of cake automatically goes to flattr? Also hopefully you're free to specify how much you want to give away, and not stuck to some amount they want you to spend. Plus of course the usual reservation with regards to online payments..

I guess easiest way to explain is flattr = digg website buttons + donationcoder model.
« Last Edit: February 11, 2010, 05:33:02 AM by justice » Logged

mouser
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« Reply #6 on: February 11, 2010, 05:31:31 AM »

Yeah we need to see more details to figure out how much they take for themselves and if there are any other charges to recipients, etc.
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justice
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« Reply #7 on: February 11, 2010, 05:34:55 AM »

Especially with it coming from the cofounder of the piratebay, I guess you could run a torrent tracker based on flattr haha. It's well thought out though you setup a monthly payment plan once then you don't need to think about paying again but just clicking buttons. However the problem will be why someone will want to setup a payment plan. and if there is uncertainty of where the unused money goes that will be an issue.
« Last Edit: February 11, 2010, 05:38:50 AM by justice » Logged

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« Reply #8 on: February 11, 2010, 05:59:30 AM »

If you are going to force me to watch a video to understand anything at all about your product, I've already lost all interest.
I'd like to (whole heartedly) 2nd that, as I too am quite tired of that rather annoying trend. ...Web rule 1: You have 3 seconds to captivate my (as a visitor) attention and trying to cheat with "Video Loading" doesn't cut it (Fail!).
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housetier
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« Reply #9 on: February 11, 2010, 05:17:11 PM »

justice, as far as I understand, there will be no "unused" money by the end of the month: because that is when all the money in the account is divided by all the support clicks you made. And after that you transfer the next batch of money into the account, to be divided by the "amount of support" in the next month.

The only thing that bugs me is that monthly plan. I don't feel like donating every month.
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mouser
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« Reply #10 on: February 11, 2010, 05:36:49 PM »

Quote
The only thing that bugs me is that monthly plan. I don't feel like donating every month.

i think that's a good point -- and it means that you don't have much control over how much you give to any one site.  the user gives up a lot of control, in exchange for a much simpler process that doesn't require much thinking or risk.

one thing that would be interesting is if flattr decided to charge a flat fee for their services rather than a percentage of money passing through the system.. if they did do that they would be the only example of such a model i've seen, and that in itself would be quite interesting.  can't wait to see some more details.
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rxantos
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« Reply #11 on: February 12, 2010, 12:40:22 PM »

As a user, I do not like that business model.

- The monthly fee.
- Give an equal share for something I REALLY like vs to something I somehow liked at the moment, but not any more.

I prefer the concept of micro accounts that at not tied to my bank account. Lets say I want to spend $100 each month. I just put the money from my bank account into the micro account, then I pay from that micro account, until the $50. I cannot get over the ammount I budgeted, and all I can loss if the account is hacked is the $100.
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housetier
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« Reply #12 on: February 13, 2010, 08:49:52 AM »

Also I do not see how flattr will survive, unless by users clicking flattr's flattr button.
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Tuxman
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« Reply #13 on: February 13, 2010, 02:27:18 PM »

Nothing's wrong with Paypal.
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Nod5
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« Reply #14 on: February 14, 2010, 08:02:55 AM »

- Give an equal share for something I REALLY like vs to something I somehow liked at the moment, but not any more.
That could be solved by multiple clicks on stuff you wish to support more, no? I agree on the other things you wrote.

Flattr might be too easy. I fear malware scripts that will attempt to clickjack money from flattr users.
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mouser
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« Reply #15 on: February 14, 2010, 08:16:29 AM »

Quote
I fear malware scripts that will attempt to clickjack money from flattr users.

while i think you are right about how easy that would be to do.. if one is getting a report at the end of the month, and not spending too much per month, it would be easy to detect.  AND easy for flattr to undo the money given to the recipient before they are allowed to cash it out.  it would probably be pretty clear if large scale fraud was attempted.

agree about multiple clicks solution to giving one person more than others.
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Curt
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« Reply #16 on: March 09, 2010, 04:10:47 AM »

So, if I forget to push the button more than once per month, that site will get the lot? Who will then get the money when I for some reason don't push any buttons at all? Will the money accumulate on my account? And when I die, who will know I have money on such account? Must the attorney fight some international company to get back my eight dollar? Hmm... maybe, maybe not; instinctive I am not taken by the concept.
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nharding
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« Reply #17 on: March 09, 2010, 09:58:25 AM »

I like the idea of true micro payments, less than 1cent that would be tied to page views (click to read more, this will cost 0.5c). Paypal does not support micro payments because of the cost of paypal transactions.
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housetier
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« Reply #18 on: March 09, 2010, 01:13:46 PM »

I have given this some thought in the meantime... There might be people who absolutely love the idea of donating a fixed amount each month. My initial skepticism mostly came from my own extremely limited financial resources.

Despite my doubts I want this kind of micropayment system to succeed. Even if only to "show them" it can be done.
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Hermit2003
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« Reply #19 on: March 09, 2010, 04:04:36 PM »

Seems like a good idea, but I'm really getting frustrated with all these sites and services that rely on videos to explain everything.  If you are going to force me to watch a video to understand anything at all about your product, I've already lost all interest.

Also, what happens if you don't click to support anyone in the month? Does your money just go to them then or does your support mean even more the next month?
I couldn't agree more. I have finally upgraded to high-speed, but had to give up long distance plans in order to afford that--and even on DSL high-speed, half the videos I try to see are incredibly slow, with long buffering periods in between each sentence. I know that's one of the drawbacks of living in the bush, but I still don't see why I have to watch videos to learn anything.
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« Reply #20 on: March 09, 2010, 04:07:02 PM »

justice, as far as I understand, there will be no "unused" money by the end of the month: because that is when all the money in the account is divided by all the support clicks you made. And after that you transfer the next batch of money into the account, to be divided by the "amount of support" in the next month.

The only thing that bugs me is that monthly plan. I don't feel like donating every month.
This one also bothers me. It's not that I don't like donating every month, it's that I can't always afford to, much as I might like to.
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Hermit2003
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« Reply #21 on: March 09, 2010, 04:08:28 PM »

I have given this some thought in the meantime... There might be people who absolutely love the idea of donating a fixed amount each month. My initial skepticism mostly came from my own extremely limited financial resources.

Despite my doubts I want this kind of micropayment system to succeed. Even if only to "show them" it can be done.

Ah yes, indeed. Me too.
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mouser
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« Reply #22 on: March 09, 2010, 04:42:36 PM »

Let's hope they dont REQUIRE you to do a monthly recurring charge -- there is nothing about the idea that depends on that.
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40hz
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« Reply #23 on: March 09, 2010, 06:52:25 PM »

Too many open questions right now for me to get behind it in anything but spirit.

The fact that it was set up by Peter Sunde doesn't give me "warm fuzzies" either.

Still, it's an interesting concept...but I wonder how it's going to play out long-term considering it is providing what, in many jurisdictions, would be considered banking services. PayPal ran into a problem just like that with India's Central Bank when it was determined that PayPal needed authorization from its regulators to operate a cross-border monetary transfer service.  PayPal had to temporarily suspend serving India until it obtained proper clearances from the banking authorities. And PayPal is an established web service whose financials and bona fides were never in question.

So I hope Mssr. Sunde has crossed every "t"when he set up this service. Otherwise he risks seeing problems just like he did with his last 'venture.'

I'm gonna mark this one "wait & see." tellme

« Last Edit: March 09, 2010, 06:56:23 PM by 40hz » Logged

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« Reply #24 on: March 09, 2010, 09:39:47 PM »

Let's hope they dont REQUIRE you to do a monthly recurring charge -- there is nothing about the idea that depends on that.
Without looking into it at all, just from what I read here, this is my thought on the model.  You must pay in a set amount each month, but the amount is set when setting up the account and can be changed at any time starting the following month.  The moneys are deposited into an account at the beginning of the month and then aggrigated into high yield short term Certificates of Deposit (or equivolent).  Then at the end of the month the monies are "distributed" (read funded) for payout mid-month.  The next month's payments come in, and are used to pay out the funds.  If the system is growing, the remaining monies are deposited into the new high-yield CD's.  Once critical mass is reached, the interest on the CD's, plus the increases from growth will outstrip the cost of doing business and profits will be made after payout.  Cashflow would be positive and excellent after this point because next month's monies would come in before payments are made (the same way Amazon was able to take off by selling the books, getting the money, and selling more before the initial bills were due).  And end users would have a warm fuzzy about it because *ALL* of their monies are paid out.  What everyone misses out on is the opportunity cost of having your money tied up interest free like that.  Actually not a bad business plan though, if you can reach that critical mass where your costs equal your interest earned.
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