It’s a problem that’s long flummoxed media outlets, and also one that’s increasingly frustrating consumers: The inability to pay a small sum, such as 25 cents or $1, to read an article online.
Yet a breakthrough could be near, as big web platforms like Facebook and Kik are building technology that could mean a new revenue stream for news outlets and an alternative to consumers having to hand over their credit card information to read a single story.
Before explaining how Facebook could finally crack the problem of so-called “micropayments,” it’s worth noting this issue has been around almost as long as the web has. As Wired reported this year (ironically, the article is behind a metered paywall), the early world wide web anticipated such payments and even created an error code—similar to “404 Page Not Found”—called “402 Payment Required.” That 402 error code, however, is still “reserved for future use.”
According to Mathew Ingram, who has written about the media industry for more than a decade, the problem with micropayment technology in the early days was that it involved too many middle-men, making it unready for prime time. In an interview with Fortune, Ingram says that media companies dislike collaborating with each other, which means that no one could agree upon a common standard for consumers to pay across different sites, back in the day.
But things have changed in technology since then, most notably the arrival of blockchain has begun offering an easy way to spend and keep track of digital money. The most famous blockchain is Bitcoin but, for a bunch of reasons, it’s not the best candidate to solve the online payment problem.
Enter Facebook. The social network has been working on a not-so-secret plan, Project Libra, to build a blockchain of its own, which will come with its own currency—something that will likely be called Facebook Coin. The company is being coy on how exactly this will be distributed, but it’s a good bet every user could receive a small batch for free, and then be able to buy more coins or else earn them by doing tasks like watching ads (which, admittedly sounds like something out of a Black Mirror episode).
Facebook declined to comment for this article, but Kik, recently issued its own blockchain-based coins for its millions of users to spend. According to CEO Ted Livingston, the idea of using Kik’s currency for micropayments isn’t just technologically possible—it’s a matter or time.
As for media companies, there’s reason to be wary, given how Facebook has previously, repeatedly burned them by promising a source of revenue, and then taking it away. Nonetheless, the prospect of getting some money rather none when a casual reader encounters their paywall should be a powerful incentive to at least try it out.
Ingram, meanwhile, says he is unsure if easy blockchain payments for news will catch on, in part because there will likely always be a free version of any given news story, and because of a “psychological friction” that impedes people paying for content.
“Someone once told me that micropayments was an idea ‘that has a lot of potential — and always will,’ meaning of course that it will never actually happen,” he says. “I would love to be proven wrong though.”
