Robert X. Cringely:

“The argument against it has always been that it costs VISA 25 cents to bill someone, so there’s no way to bill for micropayments. But surely there are ways to address this. For example, (what if) no individual is billed until he owes at least $10 (regardless of how many sites this money is to be divided between), and then whomever collects the payments aggregates everybody’s payments and sends out checks to the different Web sites. Wouldn’t this be a way to make micropayments work?”

The case against micropayments is convincing, due to high overhead related to money (how much the intermediaries charge) and decision-making psychology (is this blog post really worth “just his two euro cents”?). Affiliate management systems such as Befree or Commission Junction already pool payments from small transactions until the sum is worth writing a check for, say, $10. Maybe they’ll expand and reverse their system to collect fees from consumers and pay them back to content providers? They rely on technical tricks such as an argument passed along a URL (ie. or a transparent gif coming with its unique ID. It would take a fair amount of trust from consumers to have them let a third party track and bill their online usage on a pay-per-item basis.

Just my two euro cents! (basic hard-selling tactic: overcharge, but loudly claim the opposite.)

07/12/01 update: Making micropayments micro enough.

11/03/01 update: Nickeled-and-Dimed to Death.

11/23/01 update: The Return of Micropayments.

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