Probably one of the first questions when arriving at Paperwall will be “what are these Tickets?” This post will help explain the reasoning for tickets and specifically, why not direct cash transactions.
The tl;dr is that tickets are easier to manage, and provide discounts / promotions. They cost as much as $0.25 per ticket when purchasing, and pay out up to $0.20 per ticket when paying out publishers - the difference is what makes up Paperwall’s commission to keep the lights on.
To dive deeper into the motivation: First off, the model - Paperwall uses a credit / debit system. You top up your account by purchasing tickets, which can be redeemed against articles to read. Being per article, it uses micro-transactions, which in theory is a good one, but traditionally has been difficult to implement due to technical and operational overhead, along with the upfront friction in the reading experience.
From an implementation standpoint, micro-transactions are difficult because in their simplest form, each article requires their own transaction. This is impractical because of payment fees. Every transaction has a cost - fees, processing, back and forth with financial institutions, risk etc. Doing a transaction per read just doesn’t make sense. And nobody wants to pull out their credit card for any transaction < $1.
The next option is bulk transactions, and there are 2 options here: before or after. “Before” (top-up) involves topping up your account periodically, like when your balance is low or on a periodic basis, usually monthly. Both of these options have their pros and cons, but there’s another level - do you deal with cash directly, or do you have some intermediary credit system? Dealing with cash transactions directly is inflexible, but very explicit. You know exactly what you’re paying. But regarding flexibility, if everything is the same price, it’s not so bad. When you try to add discounts or bonuses? Things get complicated really fast. Why did this get a discount and this didn’t? Why did this get a bonus? To solve this, we can tie those together into a tangible thing - whether it be tickets, credits, tokens, etc. - and you have more flexibility. There is a single unit of inventory to rally around and pricing becomes much more flexible. Welcome bonuses, volume discounts or bonuses, referral bonuses, can all be applied. The catch to a credit system is because of its flexibility, there’s some mental math to figure out what something is actually worth, hence why some of us are visiting this post.
With that, Paperwall chooses to use the concept of Tickets - things that you pay for in advance and can redeem anywhere within its network. Tickets are worth anywhere from $0.20 to $0.25 per ticket when purchasing, and $0.20 to $0.15 per ticket when paying out publishers - the difference is what makes up Paperwall’s commission - what it takes to keep the lights on. These are the originally established rates, which will likely be subject to change. Any changes will be communicated in our newsletter and updated in our terms and conditions.
Hopefully this helps to provide clarification, but please reach out if you have any further questions.