Monday, April 7, 2008 - The Progress & Freedom Foundation Blog

Micropayments reconsidered

I have generally agreed with Clay Shirky (and Tim Lee) that micropayments either don't work very well or just aren't needed given other pricing options / business models. But my eBay activity over the past few years has made me reconsider. I was going back through some of my past eBay purchases tonight and leaving feedback and I realized that I have made dozens of micropayments in recent months for all sorts of nonsense (stickers, posters, small car parts, Legos for my kids, magazines, and much more). Most of these items are just a few bucks, and many don't even break the 99-cent threshold. I think that qualifies as micropayment material. And certainly I am not the only one engaged in such micro-transactions because there are countless items on eBay for a couple of bucks or less.

Of course, just because micropayments and PayPal work marvelously in the context of the used junk and trinkets we find on eBay, that does not necessarily mean they will work as effectively for many forms of media content. Advertising or flat user fees are probably still preferable since consumers don't like the hassles associated with micropayments. Still, they seem to be working fine on eBay, so it would be wrong to claim that they never work online.

posted by Adam Thierer @ 10:10 PM | Generic Rant , Mass Media