The micropayments challenge

(Originally posted August 28, 2007)

The New York Times recently published this article about micropayments: In Online World, Pocket Change Is Not Easily Spent.

I'm surprised that no one is talking about how all current schemes of micropayments have made it so that payment is mandatory. Requiring people to pay before reading an article or listening to a song is one thing, while letting people choose whether or not something was worth their money, after they're free to use it, is another.
From the NYT article: "...a large newspaper could sell subscriptions that would allow its readers to download music from iTunes or Rhapsody, read articles from regional papers, and watch movies and TV shows from YouTube or Comedy Central."

This sounds like bribery to me - read our paper and you can have some free music. Instead of treating their readership like children, we should instead treat them with respect. Allow customers to choose what content is worth paying for.

Again, from the NYT article: " "Open loop" systems, where the consumer pays many merchants through a single payments processor — the way micropayments were originally envisioned — are much less successful. "To date, the market has said there is insufficient demand for these services," concluded a research report Mercator published in April."

We take this as a challenge.

We believe that turning micorpayments on their head - making paying voluntary rather than compulsory - will be the key differentiator between ourselves and those who have come before us.

Just because something hasn't been successful before does not mean it is not possible. There is a time and a place for everything. Combine that with a thoughtful execution and you will succeed.

The fact that up until now micropayment systems haven't worked is due to many cultural factors. Right now there are more people online than ever before, and they are online in an interactive and shared environment. They are not just trolls, they are contributors to communities. They don't want to pay in order to receive content, but they want to give back, develop and support their communities. The time is right for micropayment tipping.