Microsoft to challenge PayPal and Google Checkout

Well what do you reckon? Third time lucky for Gates to plunge Microsoft into the forefront of online payments? Microsoft wallet (built into Internet Explorer) was a bit of a failure (as in no one used it), so they changed it to a server based system (Microsoft Passport - and still no one used it!). Now after a week of contemplation, Gates announces he's reviewed plans for an online micropayments project. Watch out for a solution to allow you to economically collect payments from a few pence to a pound at lower rates than credit card merchant accounts would charge.

The thinking behind the re-entry into online payments is a system designed so that you can charge small amounts for online content that's currently free, e.g. Tamebay could charge you 10p for reading this article and it wouldn't all be swallowed up in precessing fees. Now there's an idea... charge you for reading this ;-)

So Microsoft aren't really out to compete with PayPal or even the easier target of Google Checkout (who continue to lag way behing PayPal regardless of the freebies they try to tempt buyers and sellers with). PayPal already have PayPal Micropayments with fees of 5%+ $0.05 per transaction. It will be interesting to see firstly if Microsoft can beat these rates and secondly how easy implementation is.

In a years time you could find yourself paying to read online content from sites like online newspapers. In fact with printed newspapers in decline we predict it won't be long before they're largely published online for micropayments anyway, so Gates could be bang on the button with this one!