So Bill Gates, musing aloud during one of the sessions at the exclusive, celebrity-studded think-tank known as Davos, says Microsoft would like to get into the micro-payments game — maybe cut MasterCard and Visa out of a little action, elbow its way into the PayPal and Google Checkout business, that kind of thing. Pretty big news, right? Sure. Except for the fact that Microsoft has wanted to accomplish said goal for about the last decade or so.
Ever use Microsoft Passport (now Windows Live ID)? You sign in once with your Hotmail name and then get access to all sorts of wonderful places on the Web… that is, provided they are controlled by Microsoft. The plan to make Passport a universal ID card as well as a payment portal never really took off. Why? Because people don’t like to play with Microsoft unless they have to, that’s why. In fact, they would apparently rather get taken to the cleaners by MasterCard and Visa.
More recently, Microsoft has been establishing a “points”-based system of payment, both for Xbox Live features and possibly to compensate people for sharing music over the Zune network (assuming anyone ever does that, of course). Although he was irritatingly vague about what the company has in mind, Mr. Gates seemed to be suggesting that this points system could become a micro-payment scheme for the Web.
Let’s be frank. This has virtually zero chance of ever becoming a reality. Don’t get me wrong — I think micro-payments are a great idea, and they would help any number of fledgling Web-based businesses make a living, up to and including blogs. But there are two problems with a Microsoft points system: The first is the word “Microsoft,” and the second is the word “points.”
Points-based systems are much like the system used at casinos, or the payment card used at some restaurants — just confusing enough that you forget how much you are really spending. And the odds of Microsoft somehow convincing thousands or tens of thousands of small retailers and businesses to sign up for a Microsoft payment system? A billion to one.