Bill Gates: Microsoft Is Going into Online Payment and Credit Card Businessposted by MR WAVETHEORY at 1/28/2007 10:35:00 PM
Speaking at the World Economic Forum in Davos, Switzerland, Bill Gates indicated that Microsoft was looking into finding a way to make so-called micropayments a reality online. And to make it a reality, Gates noted that traditional credit card fees would need to be undercut, and severely. See, the credit industry makes money not only off interest, but they also scoop up 2.75% + $0.35 in fees for most transactions (on average). As you can see, this makes charging for inexpensive items quite unattractive; a $0.25 charge would be instantly doubled on account of fees. For people who have fantasies of selling web content by the page, this is unworkable.Microsoft might come up with a flat fee payment solution.
The question is, how can Microsoft pull this off? The DOW Jones newswire quotes Gates as saying, "If you want to charge somebody $0.10 or $1 a month, that will just be a click... you won't have to manage some funny thing or pay some big credit charge, where half of it goes to the clearing."
It sounds like a brilliant solution.