We’ve talked for years about the need for micropayments. I can remember in the 1990s that the pay-per-view model demanded a payment for a single piece of information. Why should I subscribe for $30 a month to a website where one article has become relevant? Surely, I could pay $0.50 cents to read that one article?
Thing is that, back then, charging just $0.50 seemed ridiculous. We were in a world where the minimum electronic transaction cost was $30 or more, due to interchange fees and the network. That’s why everything was cash, and you can’t pay two bits online for access.
Well, today we can and, in a world of inflation and a “cost of living” crisis, the perennial discussion of micropayments comes back. Right now, yes, I want to pay $0.50 for one article and I want it now.
This hit me in the face when I saw this CNN article, about how Italians have redesigned the payments game to reflect our inflationary cost-of-living crisis. Apparently, you now need to pay for someone to add cocoa to your cappuccino or cut your sandwich in half.
Take the couple charged 2 euros ($2.20) to cut their ham sandwich in half on the shores of Lake Como, or the young mother in the Roman seaside town of Ostia charged 2 euros to have her baby’s bottle heated in the microwave.
A pair of tourists were charged 60 euros ($65) for two coffees and two small bottles of water at the Cervo Hotel in Sardinia, although the owner told CNN the prices were plainly listed and the charge is mostly for the view over the expensive yachts of the nearby port.
Tourists were also charged 2 euros for an extra – empty! – plate near Portofino in northern Italy, and 10 cents for a sprinkle of cocoa on a cappuccino at a Lake Como coffee bar. Italian cafes rarely use cocoa on cappuccinos, hence why they justified the charge.
It amused me then that, after reading the article, a pop-up menu invited me to subscribe to CNN news for $5.99 a month or $59.99 a year. Urmmmm?
Either way, the combination of online paywalls and Italian add-ons makes me realise that we really need to break money down into pieces. The first piece are the wholes – dollars, euros, pounds, yen, yuan and more. The second piece are the pieces – cents, pennies, mao. Oh, and then there’s the third piece – bitcoin, ETH, XRP and the many other cryptocurrencies out there.
In fact, that last piece is likely to be a key driver for the first two pieces to move. In a world that is demanding micropayments, who the hell wants to use a bank account or a four-pillar interchange model? It would be so much easier to just load a cryptoaccount with value from a traditional account, and then trade it in micro pieces.
The problem then is that if consumers are educated to trade at the micro level with cryptocurrencies, then why wouldn’t they trade at the macro level with the same choices? Instant, zero cost, real-time payments at any level across the global network? Oh boy, does that sound attractive to me.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...