Micropayments and the Net Community

For a future venture (I'm aiming to become a net entrepenuer and stop working for soul-sucking employers) I've been looking into the market of micropayments. It's a market that shows immense promise, it has massive potential for consumers and content/product providers alike. Unfortunately, it's currently damn near useless.

Why? I hear you ask. Well, let me tell you. They're still too big. With the exception of the odd online service like BitPass there are few ways to take payments small enough yet. Most of the big services have a payment limit of anywhere from 50p to £1.50 - way too high, there are some phone services, and text ones, but who wants to stop browsing, pick up the phone and dial a number for an access code? No, the only solution is an online, single-click option. The problem is two-fold, charges and security. People will have to sign up for some sort of payment service at one point, where security checks and whatnot can be done and put in place, and how can get you get the costs low enough to allow 1p or even increments of 1p charging?

Credit cards are out, the commission and clearance charges force the price way too high, and other services like PayPal aren't really designed for micropayments, and involve lengthy sign up processes. So the way forward, one I thought was novel, is pre-paid services like BitPass run. It was an idea I had the other day. Basically, you sign up for an account, we give you a unique number (and maybe a password), we store nothing more than basic contact details. Then you purchase credit against that account number and you use it like a credit card: when you want to buy something, you click a button, enter your account number (and password) and credit is deducted from your account, then you're allowed access to the secured area/page. The 'host' then claims his credits back from us. Easy, fast, safe, anonymous.

Unfortunately, I think micropayments will need something else: a shift in web culture. I stumbled across a weblog article about micropayments over at Maddog which also has some interesting points. Once you get the technology right. Will people be willing to pay for content?

We're all used to having free content on the web, we're all used to buying magazines and newspapers. Both mutually exclusive, but now we want you to buy online content. The problem is that you can't flick through it, you can't see if there's an interesting article or two to read, you don't have a guarantee that what you read isn't completely useless - the last comes with mags and papers because it costs so much to publish and distribute offline that they have to have passed certain corporate and market testing to make it. So, would you be willing to pay, even as little as 1 pence, to look at a page on which you don't know the value or reliability of the content? I doubt it, I balk when asked to pay for content. The addition of easy pay schemes, rather than long-winded, costly, year-long subscriptions will help remove some of these barriers, but not all.

So what is the answer? Well, for established sites and companies, paid content will work, I believe, when the payment methods are sorted out. As for the rest, you could let people view half a page, then ask for money, or allow 'older' content to be view for free to build up a trust base. Maddog's ideas about 'web channels' is interesting, but I agree unworkable. There's too much overhead and time wasted clearing things with each other, and arguments are bound to errupt. Just because you think something's worth posting, doesn't mean anyone else will. No, I think the best way forward would be to use 'donation' buttons for those services created in the way I suggest above. That way you won't scare off potential customers, and while not all will pay, some will, and your reputation will grow, allowing you to charge in the future. But keep an eye out, it's been said before, but micropayments are coming to a website near you.

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