The Christian Science Monitor 'Nickel and diming' across the Internet

"A September report from the Online Publishers Association termed the growth of micropayments to its members over the past 18 months "dramatic," rising from 2.6 percent of all single- payment revenues in the first quarter of 2002 to 8 percent in the second quarter of 2003. Hoping to cash in on that growth, new companies are offering micropayment systems that they say make tiny transactions easy and secure. One such firm, BitPass in Palo Alto, Calif., expects to process more than 1 million micropayments by year's end.

"It's a matter of getting the timing right," Mr. Frey says of micropayments."

redux [01.14.04]
E-Commerce News The Death of Micropayments?

"Although many e-businesses in other industries have come back from the dot-com brink with stronger models and clearer goals, micropayment specialists have yet to make another splash. Companies like BitPass and Paystone Technologies may have survived the crash, but they have a much lower profile than their now-defunct predecessors.

"Will the concept of micropayments fade into the footnotes of e-commerce history, or will this business model find new success in the future?"

redux [01.08.03]
The New York Times A Virtual Cash Register Rings Up Tiny Transactions
[requires 'free' registration]

"THE early days of Internet commerce offered many promises, none of them brighter than the chance for people to set up Web sites and sell inexpensive digital goods like songs, articles and photos.

But most of the pioneering companies that devised transaction systems for low-cost online purchases faded away, dogged not only by the giveaway ethos of the Internet but also by cumbersome technology and fees that ate up the profit on items that often sold for less than a dollar.

Times have changed, though, and electronic micropayment systems may yet be born again."

redux [12.02.03]
Wired News A Micropayment for Your Thoughts

"An idea that seemingly evaporated along with dot-com mania is back: that the Internet would realize its full grass-roots potential if Web surfers could pay small amounts for tidbits of online content."

""Times have definitely changed," said Ron Rivest, a prominent Massachusetts Institute of Technology encryption researcher who co-founded micropayment provider Peppercoin in 2001. "I think the market is ready.""

redux [11.03.03]
The Mercury News Small-amount purchases online may finally happen

"Apple Computer's online music store has won attention for its stylish ease of use, and deservedly so. Yet one of its most interesting features has drawn little notice -- the ability to buy something online that costs less than a dollar.

The iTunes service is one of the first truly useful examples of digital "micropayments." The notion has been hyped and lampooned, with skeptics having the better case, but new technologies and services may bring this genre of money to a more prominent place in 21st-century commerce."

redux [09.07.03]
Clay Shirky Fame vs Fortune: Micropayments and Free Content

"Mental transaction costs create a minimum level of inconvenience that cannot be removed simply by lowering the dollar cost of goods.

Worse, beneath a certain threshold, mental transaction costs actually rise, a phenomenon is especially significant for information goods. It's easy to think a newspaper is worth a dollar, but is each article worth half a penny? Is each word worth a thousandth of a penny? A newspaper, exposed to the logic of micropayments, becomes impossible to value."

Mental transaction costs help explain the general failure of micropayment systems. (See Odlyzko, Shirky, and Szabo for a fuller accounting of the weaknesses of micropayments.) The failure of micropayments in turn helps explain the ubiquity of free content on the Web."