Like flying cars, web-based micropayments always seem to be just a few years away. Unfortunately, we’re still waiting for the balance of security, ease-of-use, and ubiquity that would deluge the web economy with untold trillions of Roosevelts.
I suspect Apple have it figured out. The coming release of the iPhone 5S, if it bears the long-rumored fingerprint sensor, will mark the beginning of the micropayment revolution. Biometrics will provide the required level of security and ease-of-use, while integration into the iPhone will practically guarantee ubiquity.
This is how I see it going down:
- At first, it’ll be about skipping or removing ads. On launch, micropayments the Apple way will just let iPhone users skip or remove advertisements (probably integrated with a new web-based iAds platform, but that’s another post). Since desktops, laptops and non-5s devices won’t have access to Apple’s walled garden of fingers, it will be marketed as an “experience enhancement” for iPhone users who are willing to pay. Which brings us to…
- iTunes-like pricing. Apple will take a 30% cut of payments coming through your site. You’ll collect your payments periodically from Apple, which will serve as a middleman to lock in low credit card fees for itself. You won’t complain about any of this, because they’ll make it so wonderfully easy with…
- Stripe-like website integration. Apple will provide a stripe.js-like integration option to web developers. A single script on your site will manage the payment process, directly accessing the fingerprint sensor through a device API. This will open a secure tunnel to Apple, which will confirm the user’s identity and charge the credit card associated with the user’s Apple ID.
From a site visitor’s perspective, the process will go something like this:
- I visit an “iPay Micro”-enabled website, and tap on the article I want to read.
- I read a brief preview of the article text, while the fingerprint sensor built into my home button pulses to indicate that it is available for use. As a user, I am presented with two options: swipe to micro-pay, or watch a 30-second video promoting Ensure. As my nutritional needs are more than adequately covered by PBR and pizza-flavored Combos, I choose to pay to skip the commercial.
- I swipe my finger over the home button once. This causes the fingerprint sensor to glow solidly, and a subtle overlay to appear on my screen that indicates the cost of the article; in this case, it’s five cents. One more swipe to confirm, my card is charged, and the content is revealed.
- If I revisit the content on my laptop, Apple knows that my Apple ID has already purchased this content, and I can read it without paying again.
So, what’s so revolutionary about a proprietary platform that just lets you skip advertisements? Short-term, and by necessity, it’s a minor move. Long-term, it builds a foundation for Apple to become the master of paid content on the web. There are over 575 million active iTunes accounts today; that’s a huge population of users (and, more importantly, credit cards) that Apple can dangle in front of content providers to get its way. Eventually, the ad-skipping model may disappear entirely, replaced by a “log in with your iPay ID, or swipe to continue” micropayment interface that would work for desktop and non-5s users too.
Whether Apple opens their payments API to other biometric methods in the future (Google Glass retina scanner, anyone?) will depend on whether the company sees it as a competitive UX advantage to promote iOS device sales (in which case it will remain locked down like iTunes), or as a revenue channel in its own right. With Apple’s closed-ecosystem history, I’d bet on the former, but the sheer amount of cash on the table could change the corporate calculus in Cupertino.