Three years ago, I remember people were still frequently discussing micropayments. Micropayments are, as you may gather, very small payments which are too small to even justify costs such as credit card processing.

Several companies have tried to implement micropayments as a system for online paid content, as opposed to subscription-driven methods, but most of these ulimately fail.

In 1998, Jakob Nielsen predicted that micropayments were they way forward, as opposed to advertising or subscriptions, in his essay ‘The Case for Micropayments‘ but he obviously made a misjudgment and the advent of broadband internet saw many of his arguments (such as removing the need for advertising would speed websites up significantally, which would actually save businesses money) become significantally weeker.

In 2002, he came to the realisation that ‘we are not going to get true micropayments’ but we may get ’services that rely on user payments’ with bigger payments. His latter prediction was partially right, as the likes of online music sites successfully utilise payments of up to about £1 fairly successfully, but £1 is much bigger than what a micropayment is.

Nearly three years after Jakob’s essay, a wiser chap called Clay Shirky published ‘The Case Against Micropayments’ which stated that ‘the short answer for why micropayments fail’ was ‘users hate them’ as it leads to anxiety and hesitation. Shirky was right, as they didn’t take off and still have not taken off.

Micropayments are not economical to administer. If each page online cost 1 cent to view, how much of that cent would be spent on administration? Like any payment system, you require staff, hardware, a processing system and perhaps most important time and effort. Would a small site’s webmaster be willing to put the system into place, making his website slower as it would have to call an external site, if he were to only earn about $0.0025 per page? I think not.

Another point: do users or businesses want to pay? I wouldn’t. I can easily read 5 small web pages a minute, and I would hate to be paying 5 cents a minute or $3 an hour. I think relevant advertising is the best form of monetisation as it gives users a choice whilst still giving them access, is economic for webmasters and advertisers, and it can help the user.

Micropayments don’t work and in my opinion nor does any paid content. 99% of the time, there’s a free alternative to any paid content. I hate it, though, when I can’t get access to some content - and sometimes paying isn’t even an option - such as journals hosted on JSTOR.