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Comment by ghaff | Hacker News Reader

The standard knock against micropayments is mental transaction costs--going back well over a decade. I think it's fair to say that the cost of doing the payment transfer isn't really an issue; even if it is with current systems, that can be dealt with.

However, there is an issue with having to explicitly decide to pay 5 or 10 cents every time you want to read something online. And if it involves having to get an email with attachment sent to me, the mental overhead and friction is even worse. It's not that people will never buy but there's a huge difference between free and just a few cents.

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That's why batching needs to be used, so all those little 5-10c transactions get accumulated and sent as one larger one. Then once a month or when you've read $5-10 worth of articles you'll be charged. This usually means that there will be one, or a handful of, providers so that you won't have an outstanding tab or credit at too many places.

So there we get back to a subscription magazine model. It's easier mentally to have one, or a few, subscriptions charging a fixed amount per month to read content. Unfortunately even if you do pay $5-$10 per month for a subscription, the publication can make more money from you by selling ads in the publication.

That's practically what we do by using a wallet -- it's basically batching of payments (with less risk for us, asking for an upfront payment after a user has spent the $2,50 he gets for free when he signs up).

Maybe. I still have to decide at the point of download whether I want to pay, albeit a small amount, for the article in question. I don't say it can't work. For a long time, it's how we paid for telephone service. And it works for music/movies, although those goods each have their own unique characteristics--even if subscriptions are becoming more popular. (Music you reuse; the movie watching experience is something of a commitment.)

Of course, subscriptions have their own issues especially if the content sources are fragmented.

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