What are practical use cases for this automated payment stuff? What do you imagine the market size for something like this might be?
Discussion
It’s premised on the logically sound assumption that traditional payment methods’ (namely, credit card) fee structures don’t work for billions (trillions?) of sub-cent machine-to-machine payments.
Who’s going to tolerate paying VISA 35 basis points + 30 cents to pay for a $0.00005 API call? No one.
But the SaaS/AI companies are fine to sell prepaid plans for say, a few hundred dollars a month, that customers then draw down against.
There just isn’t any real proof that we’re anywhere near changing that pricing model.
As for TAM, theoretically massive, but see above.
Yeah I mean no one will pay 30 cents on a micropayment but that’s precisely what credits are for? The problem is solved in a way, but people think it’ll be solved to not even use credits? I don’t get it … the incentives don’t even align for companies. You WANT people to have unused credits and find a reason to come back to use your product… why would you ever want direct micropayment transactions? What am I missing?
Precisely.
The case in which I see this changing is if something like MCP takes off. Then you could have agents discovering and consuming services that the user/customer didn’t plan ahead for, and therefore doesn’t have credits for. That’s where it gets interesting.
But even then, we already have marketplaces emerging for this. So you just have credits with the marketplace.
Open Router is exactly this type of wide access platform. You prepay credits and access a wide variety of models. It’s not even a marketplace. With marketplaces you’ll get even better pricing and i agree, the incentives for bot to bot payments are still missing imo. But so many people are talking about this now, I wonder where my thinking has gaps in it. Maybe the scale and efficiency and speed enabled by what comes in the future is very profitable? 🤔
My observation is that these are all VC-backed companies scrambling for a narrative that holds. No shade, but it does not mean it's real.