Arguments against micropayments

Why not use web technology to charge people very small bits for downloading songs, or reading blogs for that matter? An earlier note of mine discussed mental transactions costs — having to ponder the small charge each time — as a potential problem. An excellent post by Daniel Davies provides further, and better, ammunition against the micropayments idea. His key point: at some point micropayments have to clear through real financial institutions and the real shuffling of paper. Right now we don’t have the technology to do this more cheaply than credit card companies do, and they don’t find very small transactions to be worth their while.

Addendum: Here is a good response in defense of the practicality of micropayments.


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