[tzs]

> Are there any promising avenues towards microtransactions that gets around small card transactions getting a hefty fee? Or an approach that doesn't require one company to have a monopoly over it?

Either one company with a monopoly or maybe a small number of companies is probably the only feasible way to do it, because efficient payment processing is only half the problem.

The other half is taxes. Every time someone in a browser pays to unlock content provided by someone in a different tax jurisdiction some government is likely to view that as a taxable sale that someone has to collect sales tax or VAT for.

In many places (EU, US) it is the jurisdiction where the buyer resides that is owed the tax, but the seller who is supposed to deal with collecting and paying it.

Unless we can get a lot of countries to make special rules for small consumer content purchases that greatly simplify this, the most practical approach is to have a small number of content marketplaces.

So say you are in the EU and want to buy an article from the New York Times. Instead of directly paying the NYT you would go to one of the market sites and buy a NYT access token from them. You can use that access token to get your article from the Times.

What going through the intermediate marketplace does is make it so your monetary transaction is with them, not the NYT. Instead of each content provider having to deal with taxes in dozens of different jurisdictions it is just the marketplaces.

The marketplace would pay the NYT for the access token, but that would be a business to business sale of a product for resale which most places exempt from sales tax and VAT. It's just going to be ordinary income for the content providers that they report on their own income tax.

You don't want too many separate marketplaces so that content providers can reasonably offer their content in all of the marketplaces. That way consumers just need an account at one marketplace.

The marketplace approach also largely solves the problem of transaction fees. Instead of each article you unlock for $0.10 being a separate charge on your card you'd preload your account at the marketplace you use. You credit card would only be charged for the initial prepay and then whenever you need to refill it.

The big issue I see is keeping it from devolving to something like the current streaming movie/TV market where content providers make exclusive deals with different marketplaces.

[BlueTemplar]

But why is the VAT a showstopper ?

Because of extra complexity ? But the payment software itself can figure out the exact amounts. Which then can also be aggregated monthly/yearly.

Not to mention that plenty of jurisdictions only require that for businesses, while non-businesses don't have to report anything about their donations/sales unless they cross a yearly threshold.

[wtracy]

I can't find it now, but several years ago a dev posted his experiences here dealing with VAT when selling software across the EU.

He had to comply with a completely different set of tax laws for each EU member state that he received a purchase from. The cost he paid to his accountant to be able to be in compliance was like twice what he paid in actual taxes.

A big party of the problem is that many of the tax laws were so inconsistent and vaguely worded that every transaction had to be gone over manually.

[tzs]

That sounds like it was fairly long ago. With the introduction of the VAT MOSS (Mini One Stop Shop) system somewhere around 2015 it got a lot easier. VAT MOSS got replaced with something else a couple years ago, whose name I forget, but it largely works the same at least from the point of view of a non-EU company selling digital goods via the net into the EU.

The way VAT MOSS work is that instead of having to register for VAT collection in every EU country you sell in, and having to deal with reporting and remitting in every such country, you just have to register in one. You do all your reporting and remitting to just the tax authorities in that country.

You still have to collect the correct VAT on your sales into the other countries, but you report those sales to the country you are registered with and turn the money over to them. They deal with then reporting to and paying the other countries.

We're registered in Ireland. I wasn't involved in registering, but the person who handled it told me that it took something like 10 minutes on the web, with no need to interact with any humans. The quarterly reporting is, I'm told, a simple upload of a CSV file that contains a line for each EU country we had sales in listing the total amount of sales, the VAT rate, and the VAT collected.

[wtracy]

That sounds like wonderful news!