Comment by jdietrich | Hacker News Reader

Comment by jdietrich | Hacker News Reader

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No. It's a solution in search of a problem. There are plenty of businesses that would like to receive micropayments, but time after time customers have rejected them. Even if you somehow created a system that was absolutely seamless and required zero effort on the part of the user, you'd still have to convince people that they actually want to make micropayments.

The trouble is that if you set a price that is very nearly free then you are inevitably competing with actually really free. Dan Ariely's research has shown that customers massively overvalue anything free. Customers overwhelmingly prefer a free good to a good at any price, even when there is a significant difference in quality. No experimenter thus far has managed to break this natural gravity towards free in preference to any price. Add in the inevitable friction of the act of payment and you've got an overwhelming barrier to entry that without fail drives the mass of the market towards free alternatives.

There have been a litany of failed micropayment services, all of whom failed for the same reason - rather than doing the Agile thing and finding out what the customer wanted, they tried to impose a 'great idea' on a market that has consistently rejected it. Why exactly are you going to succeed where dozens have failed? What are you going to do differently?

http://www.predictablyirrational.com/pdfs/zerofree.pdf http://www.shirky.com/writings/fame_vs_fortune.html

I can see your concerns, most of which are of course valid. A lot of people failed doing this kind of thing, though there were a lot of failures during a time when the internet clearly was not ready for that kind of thing in general. Nowadays, thanks to people like Rupert Murdoch the thought of paying for something gets at least a little attention (I do not think that news content is suitable for this approach).

The companies we will focus on are providers of exclusive content or services, many of which already sell their stuff using the freemium model. I am not saying that all of these will embrace micropayment, but I am saying that there are a lot of people worried about improving their conversion rate. If the lowest option you offer a customer for buying stuff is a 20$ monthly membership, of course you lose a lot of them. Being able to easily acquire small payments, whole models could chance.

As to your second concern, the whole point of this post is being agile, to get customer feedback before everything is set in stone. We do not want to impose our great idea, currently we have a basic understanding of how a simple and flexible solution could look like, and would like to validate our approach with the help of some cooperators.

Thanks, I read the html-linked content. He talks about the "mental effort" required to make a micropayment and how that's a hindrance to the technology. I agree in that I wouldn't want to take the time to "OK" every payment. But that doesn't kill the entire concept.

It seems what we need is a very, very simple payment model. Suppose, for example, I tell my browser(s) that I am willing to pay up to one cent for an article from the Wall Street Journal. When somebody from HN posts a pointer to a Walt Mossberg review of Apple's latest gadget, the link appears in some distinctive format, like a green-colored link (or with a '$' suffix, etc.) When I click the link, my wallet is debited one cent and the article appears. There's no extra effort on my part, except for an occasional wallet reload.

This would seem like a technically feasible approach that avoids the mental effort of going through with a separate purchase step. OK, not everybody is going to be technically astute enough to set themselves up with whatever wallet technology is used...but this is just another problem to be solved. Maybe PCs and netbooks come with built-in wallets preloaded with a few dollars or euros. Maybe wallets are set up via multi-level-marketing, so the tech-savvy set up their friends and family. Maybe something else.

Point is, I don't think it's an impossible problem. We just don't have the right models yet.

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