The real reason micropayments fail: They ignore existing infrastructure and ways people transact business.

Take Salon.com. I am referred to Salon articles every week by blogs, but I NEVER pay to read the full articles. I have never signed up for a free "day pass." Why? It takes time. I'm not going to go through a login or registration procedure for each web site that charges for content. Some news sites only want me to tell them my age and zipcode - no name. I don't even fill out that simple form. Forgetaboutit!

Recipe for success:

1) Major credit card companies collaborate and issue a secure procedure for micropayments.

2) All web sites charging micropayments adopt guidelines dictated by the card companies. Every web site displays the same image or descriptor to denote paid content. Your browser could also flash an alert in the status bar to indicate a link leads to paid content.

3) Users clicking onto paid content either have their browser set to make automatic payment, or to be prompted to authorize the transaction.

4) Card companies give card holders, by default, micropayment accounts. Your micropayment ID number is different than your credit card number, but you receive a combined bill at the end of the month.

5) Micropayment accounts are small by nature. Your line of credit on your card could be $4000, but your micropayment credit line is much smaller, say $100 by default. If a thief accesses and abuses your micropayment account, you pay $15 and the card company writes off the rest like they do regular card theft.

6) A browser button or bookmark allows quick review of your micropayments to date, to alleviate theft concerns and allow quick retrieval of paid content.

7) Card companies do not charge transaction fees for the first two years, to secure acceptance of micropayments in society.

Why would card companies do this? A couple years down the line they charge 1 cent per transaction. The shear number of transactions (billions per day) provides the profit.

The biggest barrier to micropayments is the lack of a painless method of conducting micropayments. No company has presented us with an easy micropayment system. You cannot declare defeat before the game begins.

Posted by: Doris on September 8, 2003 12:00 AM

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I still think that the way to structure it is to charge users through the monthly ISP bill, by quantity of pages viewed, with the ISPs aggregating their customers' usage and forwarding fees to a disburser. Oughta be some kind of window which crops up on a site alerting you that pages will cost.

As for Salon, maybe every content provider who wants to remind people that great content isn't always free should go out of their way to link to the Salons & WSJs of the world.

Posted by: Frank on September 10, 2003 10:03 PM

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