BitPass’s New CEO Hints MSN Deal Could Be Just the Start with Microsoft

BitPass Inc.'s agreement with Microsoft Corp. to process payments for digital content sold through regional sites operated by Microsoft's MSN portal may be just the start of a broader payments relationship with the Redmond, Wash. computing giant, says Douglas S. Knopper, BitPass's newly hired chief executive. Knopper, who joined Menlo Park, Calif.-based BitPass in November from DoubleClick Inc., says Microsoft has already become BitPass's largest client. In an interview with Digital Transactions News, Knopper says he can't discuss any deals not yet announced, but adds observers inquiring about the possibility of agreements for payments processing outside of MSN are “not necessarily out of line.” BitPass is spending “an awful lot of time” in discussions with Microsoft, he adds. BitPass, which manages stored-value accounts to process micropayments for consumers who use the accounts to buy online content like articles, photos, and music, announced last month it would process payments for content sold through MSN, starting with ninemsn in Australia, a joint venture between Microsoft and Publishing and Broadcasting Limited, an Australian media company. “They're looking for a way to monetize their content across many channels [such as games, ring tones, and films],” says Knopper. “We're able to provide consistency of buying experience.” The content sellers, which include MSN and number anywhere from six to 10 at any given time on ninemsn, pay BitPass's fees directly, Knopper says. BitPass's published rate is 15% for transactions of $5 or less and 5% plus 50 cents for payments over $5. He says the agreement with Microsoft calls for rolling out BitPass to MSN's other regions, including the U.S., though he says he can't yet say when. “We agreed ninemsn is a good testing project,” he says. Knopper says the MSN deal fits into a broader strategy that calls for reaching out to Web-site operators of all sizes that sell digital content, often for prices under $1. “The conclusion I've come to is that the monetization of digital content is close to a tipping point,” he says. “You'll see sites look at multiple revenue streams much as cable [television] has done. The equivalent to pay-per-view hasn't been established yet but is getting there.” Knopper says portal such as MSN are part of his strategy but, he says, “I wouldn't say I have a portal strategy. Our goal is to provide platform capabilities to anyone selling digital content.” BitPass, which began commercial operation two years ago and claims processing giant First Data Corp. among its investors, manages payments for 3,000 merchant clients so far, up from 1,900 a year ago. Consumers fund their accounts with credit cards or PayPal. BitPass refuses to disclose numbers for its user base.