Bill Gates Wants To Cut Up Your Mastercard, God Bless Him

People like to complain about PayPal and other online payment methods. People also like to complain about Bill Gates. But they will build a shrine to the guy if he manages to slash credit card fees by pioneering micropayments on the web. Because he's not gunning just to make PayPal obsolete; he's going for the big dogs, too: MasterCard and Visa.

Speaking at the World Economic Forum in Davos, Switzerland, Bill Gates indicated that Microsoft was looking into finding a way to make so-called micropayments a reality online. And to make it a reality, Gates noted that traditional credit card fees would need to be undercut, and severely. See, the credit industry makes money not only off interest, but they also scoop up 2.75% + $0.35 in fees for most transactions (on average). As you can see, this makes charging for inexpensive items quite unattractive; a $0.25 charge would be instantly doubled on account of fees. For people who have fantasies of selling web content by the page, this is unworkable.

One click micropayments with miniscule fees might make a lot of little businesses thrive on the web, cadging a few pennies for content from a mass audience. After that, Bill, there's a lot of money in them thar plastic cards.

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