I haven’t followed the whole thing too closely, but I believe that BitPass has been around since 2002 or so. It was only in late 2005–perhaps in response to services like BitPass–that Paypal established a micropayment fee structure that would make it feasible to use Paypal for these kinds of tiny payment amounts.

Until Paypal set up that service specifically to address micropayments, their fee structure just wasn’t feasible for accepting tiny payments. (No sense in using Payal to collect a ten cent payment if they’d charge you twenty cents for the service.)

At one point or another, we came across BitPass and it seemed like a marriage made in heaven. Here we were, a small independent company trying to figure out how to make a profit from out tiny little things, and here was an organization that allowed one to do so.

Around that time, one of my programmers suggested we try something else: to distribute comics on cell phones, with BitPass as the method of payment (which is why I’m even mentioning this here… though it might also have to do with the fact that this seems to be the only place I’ve seen to even mention the passing of BitPass). I remembering going around SPX 2003 trying to sign up cartoonists for the plan, and everyone seemed very eager to have their work not only on a new platform. And the idea that they might also make money through it sealed the deal.

Long story short… it didn’t take off, for a variety of reasons. And while it might sound unprofessional to blame BitPass for any of it, I will say this: they were just another company who had a great idea that assumed said brilliant notion was just enough to get the whole world to pay attention to them.

As its been noted, buying “cards” in $3 (and $5 and $10) denominations pretty much killed the whole point in the first place, and they never were able to sufficiently differentiate themselves from PayPal.

And that there was one of the primary problems, IMHO. Their constant “we’re like PayPal, but…” mantra, both with the public, and to their contributors. If there’s one thing I’ve learned about business is that if you are constantly going to mention the competition in your sales pitch, you had better make yourself looks clearly superior, no questions asked, in half a heart beat. Otherwise, you can forget it.

I have absolutely no idea what degree of involvement that McCloud had in the company as a while. Granted he was one of the chairmen of the board, but almost everyone knows that folks in that world have little to no involvement with day to day operations. That’s not a knock, just a fact of business. But at least he tried passing along the word about various comics on his blog. Anyway, I have to wonder if he knew of all the internal stuff that was going on. I respect him enough to think that maybe he wasn’t, since from my point of view, it definitely felt, especially near the end, like another company just burning through bags and bags of VC money with people at the helm going as far as they can, till the next idea and investor.

In the end, companies like BitPass need to exist so others can learn from the mistakes and make the next attempt stronger and more sensible.

Sure, after that initial payment, it’s fine, but didn’t they sort of kill themselves right there?