Just learned that the micropayment service Bitpass.com is going out of business. I quickly scrounged up my Bitpass login and checked to see if I had any balance left. I’m sure others will do the same. Nope, zero balance. I then stumbled on the Bitpass fee page pictured above and learned that on December 6, 2006 they instituted a new policy to deal with “inactive accounts” (emphasis mine):

For U.S.-based accounts with no activity for a period greater than 90 days, a $5 monthly fee will be charged.
For U.S.-based accounts with non-zero balances less than $0.99, a monthly charge will be assessed the lesser of the account balance or $0.50.

Man do I ever despise companies who do this. I’m glad they are biting it.

You sign up for something and the customer belief is that your money deposited will never be considered inactive. Is a dollar I put in my wallet somehow inactive 20 years from now? The value will diminish, sure, but it will still be worth something. The wallet police won’t come and just take it because I didn’t spend it.

Inactive account policies introduced without a grandfather policy on the funds already deposited are theft to me. It’s a way to say, hmm, ok, here’s how we can take money from the people that aren’t using our service. It’s one thing if these policies exist before you deposit the money — hey, read the terms — but quite another to introduce these policies later as Bitpass has done. I’m sure it’s legal since they probably posted something and dispatched an email (that probably got caught by some/most/all customer’s spam filters) but it’s dishonest and wrong.

Bitpass ironically has a picture of horses racing in the masthead of the fees page (pictured above). They might as well have attached moneybags to those stallions.

A more honest way to deal with inactive accounts would be to refund the deposited money less any reasonable fees for doing so. Since Bitpass was supposed to be a micropayment service, the fees should have been minimal to the customer.

Digital River will refund leftover BitPass balance
As part of the site closure that appears to be exactly what will happen with the money that wasn’t absorbed by the monthly inactivity fees charged in December and presumably January too (?) were taken according to an email quoted at Techcrunch:

We have partnered with Digital River to provide operational support during the period prior to shut down. As of today, January 19, 2007, all Bitpass Buyers with US dollar denominated accounts are being notified that they will have seven (7) days to spend any amounts that currently exist in their Bitpass Account.

During this seven day period, US Buyers will not be able to further fund their account.

On January 26, all US Bitpass Buyer accounts will be closed and Digital River will begin the process of refunding all unspent monies to the accountholder.

Techcrunch head honcho Mike Arrington confirms Bitpass was one of Guy Kawasaki’s projects in the TC comments area. Kawasaki is author of the book Art of the Start and has his own blog titled How To Change The World. I checked there to see if he’s addressed this situation as of this post. Nope. It’s a weekend, perhaps Guy is preparing a post to explain the situation. It will be telling if he doesn’t say anything about Bitpass. Give him some time.

Anybody who has been in business awhile has had or will have failed projects. Me, Guy Kawasaki, lots of people. It happens and I’m not criticizing anybody for that here. Changing the world isn’t going to change starting and failing some business ventures. However, I’d be really curious to hear Guy’s take on policies to claim inactive account monies like Bitpass introduced on December 6, 2006 after the fact. This didn’t impact me, because I believe I spent all the money I had in my Bitpass account, but if one penny was taken from any other Bitpass customers this way … well, you tell me what you think of these policies below. My opinon is it is very shady activity.

Microsoft holds the best and strongest position in microtransactions
As for what this means for the health of micropayments business? Nothing has changed. I still think Microsoft is in the best position with their Live Marketplace to make the first significant splash with micropayments. They already are in the gaming sector and the movies/TV side is doing better than expected too. I remain hopeful they will tie all this into AdCenter and make it an affiliate program. Google doesn’t have an answer to this yet. For that reason alone, the boys and girls in Redmond should be all over this idea.

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