The Wardman Wire

Fraxion Payments have just launched a Wordpress Plugin which allows micropayments to be implemented on the Wordpress platform. This is one more way in which freelance writers, journalists and other bloggers can build their own income streams, at a time when media are under pressure financially.

Chris Wilkins, one of Fraxion Payments’ founders, gave this exclusive in-depth interview to the Wardman Wire.

Who are you?

Fraxion Payments is really two people, Chris Wilkins and Dan Stevens. We started working together something like eight years ago on another project called www.towergames.com. It started out as a hobby and has grown from there, but not very far. However, the technology within Tower Games is brilliant and ahead of its time in terms of interaction on the internet. However, Tower Games is a topic for another discussion.

The important aspect is that for well over seven years Tower Games has had an extremely well functioning “micropayments” system for its internet games. People pay about $1 for each game. We have never had any objections from our members about the cost except that we didn’t have enough games. We know where to take the site but, frankly, never had the money to do it.

So, along comes Walter Isaacson with his article about micropayments (”How to Save Your Newspaper“) and we saw something; it would be very easy for us to migrate our system to be used for bloggers for their content. And since we had refined and polished our system over many years we knew exactly how to do it, how to make it work, what people want, and how to make it easy. Thus Fraxion Payments was born.

What is Fraxionpayments?

It is purely and simply a way for bloggers to charge micropayments for their content, as little as US1c. We have never believed in this strange idea of “free” content. We saw the failure of “free online games” with Tower Games. Some years ago the web had hundreds of free online games paid for with advertising. Nearly all of them are dead and gone now because they never made any money. Tower Games still chugs along because we charge.

We can contemplate a time over the next few years where all the blogs which are free will disappear. Now this thought may start up a howl of protest from those who are almost religious about the concept of “free with (google) ads”. But I would point out that if this worked then all the thousands of former-journalists both in the UK and USA would merrily go and get a blog, put Google Ad words on there, and away they go. They would have a wage, and wouldn’t starve. But this is not happening. So no matter what some pundits say, this model is broken.

Plus after a while it becomes very unsatisfying, putting in lots and lots of work to produce good stories on a blog, but getting nothing in return.; eventually something has to come back in order for someone to keep doing this.

So we said, just as we do with Tower Games – how can we charge for the content? A (WordPress) blogger can now get our plug-in, install it, and within minutes charge for their content.

This will be good for journalists and writers. This will be good for readers because without payment, an exchange for work, effort and quality, good writers have zero incentive to write good articles and publish them on their website. They get nothing, or very little, out of it.

Perhaps in the past the mainstream media would acknowledge them and pay a blogger for an article. But even that avenue is under threat, with many free-lancers saying their payments have declined dangerously with newspapers and magazines paying less and less for good articles.

And the readers? Why wouldn’t someone pay 1c, or even up to 5c, with one click, for a good quality read, something of note and has some real information in it? Of course they will once they are educated to do it, and enough bloggers have picked up the plug-in. Once that critical mass has been reached I think the days of people zipping about the web reading whatever they like, vaccuuming up mountains of content that took literally days to create, will be gone.

Which platforms do you support?

Currently we have only the one plug-in, and that is for WordPress. I believe it supports all recent versions (but wouldn’t hurt if writers upgraded their WP to the latest edition). In the future we may well create plug-ins for other blogging platforms.

Wordpress Multiuser is also a platform we are going to be checking out.

What models of micropayments do you use?

We use a simple form of micropayments, that is, a small payment for an article. We do not consider other models, such as monthly subscriptions, to be micropayments. I don’t believe that other models, such as those that give you a number of pages per month and then you have to pay, won’t work.

Humans being humans, when they hit the limit they will simply wait for the end of the month to come before they read again. Systems like this have been tried in various fields and always run into this problem.

The simple answer is; you pay per article as you go. End of story. And that is what Fraxion Payments does and why it is unique. To get a system to do this is not simple. In fact, if we hadn’t had the seven years of experimentation at Tower Games we probably wouldn’t have been able to do it either. When we decided to put this together we found 80 per cent of what needed to be coded had already been done.

So our model is simply a method of “locking” articles. An author can lock as much of an article as they want, and charge as many “Fraxions” as they want for a reader to unlock. A Fraxion is about US1c. They aren’t all the same value because some people can buy larger amounts and get discounts. So in fact most Fraxions will be less than one cent.

And once a person has a Fraxion Payments account for the most part to unlock an article will require only one click. Once people get the hang of this it will work wonderfully. And our experience at Tower Games is that people are willing to pay when they see value for money.

There have been some “micropayments” systems that I have seen that charge $1, $5, or in one case $20 for an article. This will simply not work because people have an instinct for weighing value. But 1c, or even 5c or 10c, I can’t see anyone complaining about that. Some who are used to free content may be upset for a while, but when they see that the stories are so much better quality they will be happy to pay.

Perhaps some writers will publish poor quality content. But then they won’t create a readership. So this is not an issue. Those who write good stuff, their internet readers will keep coming back and they will prosper, with happy readers.

To quote Walter Isaacson, who I mentioned earlier, “A micropayment system would allow regular folks, the types who have to worry about feeding their families, to supplement their income by doing citizen journalism that is of value to their community.”

(Read more here: http://www.time.com/time/business/article/0,8599,1877191-1,00.html)

But of course it wouldn’t be just “ordinary folks”. It might also be some of those tens of thousands of journalists the mainstream media has let go over the last few years. They can grab a lap top, fire up a WordPress site, go talk to the huge list of contacts they have built up over many years, and get back to work. But this time working for themselves.

So, in summary: Fraxions, worth about US1c each, to unlock an article is our model. And writers / publishers set their own prices.

How – as the producer of the plugin – will you make your money?

We take in the revenue and then pay out royalties to those who sold their articles. We know exactly who sold what articles for how much. Then we add it up and send them the money. At the moment you can earn up to 85 per cent of net royalties. We would like to increase this but without getting into trouble.

Which payment processors do you support?

Currently our system is specifically designed to work with PayPal. But they of course accept any credit cards. It came about this way because Tower Games was set up like that years ago and it was by far the easiest and quickest thing to do.

Can you explain scenarios it is designed for, where it would work well?

Quite simply, this will work for any material you put onto a WordPress site. At the moment the most obvious are news feature articles, but this can be expanded in different directions and into different niches.

For example, if someone wants to use Fraxion Payments for an online fishing magazine, they could do that; or to mention a few others book reviews, movie reviews, car magazines, shooting, hunting, country, racing, caravans, local news, regional news, exclusive international breaking news, even video feeds.

I have written a fantasy book. It is conceivable that readers pay, say, 1c per every 1,000 words. This would open up publishing to all those people the big nasty publishing industry has knocked back.

I will also say that we tested our plug-in on an iPhone, and it worked just fine. So if your question is will our plug-in work through internet devices, absolutely. If a device can connect to the internet and open a browser, then Fraxion Payments will work (without the need for extra things like apps).

Who are your competitors?

There have been a number of other companies who have attempted to put micropaments systems together and, to date, none of them (so I believe) have ever got any traction.

Plus I think this industry is only getting off the ground. It is far too early to say who will be the movers and shakers in it, including us.

$200 seems a very high minimum payment to users of your service, compared for example to advertising networks which will go as low as $10. Why is it that high? How big does a blog need to be before that becomes practical?

Well, I guess, putting it bluntly, we want people who want to produce good quality content with a real story to them. That is, people who want to view this as a potential income stream and will approach it as such. Let’s face it; you will starve off $200 a month, and we would like to think people will be able to produce a proper income out of this one day. At least that is the idea.

On a more practical note, however, Paypal charges us for transactions coming in and out. When we pay someone their royalties Paypal will charge $1. So to give out payments of $10 just flat out does not make sense.

We thought of $100, but that is still 1%. When you are talking small margins this is actually significant. If we are to increase our royalty payments, this is absolutely one area we have to look at. I can assure you if we weren’t charged this $1 then paying out, say, $50 a month would be fine by us.

But we are not stubborn about such things. If the bloggers who use Fraxion Payments let us know they want their payments sent at a lower amount, and they are happy to wear the transaction cost, then we would be open to this. We wouldn’t say no.

Chris and Dan can be contacted via the Fraxion Payments‘ website.