Comment Transactions are not free (Score 1) 131
The problem with micropayments is twofold.
The primary problem is that it is very difficult to create a financially profitable micropayment system for the operator. If you look at banks (in Finland we have a very efficient direct bank transfer system, top of the world, not cheques) and credit unions, they can not really handle anything less than several euros. Telcos are actually the most skilled profit makers on small transactions, but even their limit is around 10 - 30 cents.
It is possible to push the cost of profitable transaction lower, but it is not trivial. The proposed micropayment systems have usually focused more on technology than finance or customer acceptance.
The second issue is are people willing to accept the system. That is market psychology. Personally, I think that people are willing to pay even small amounts, but it has to be transparent and consumers must be protected from unforeseen charges. Most people pay for electricity and telephone per usage without thinking about it every time they use the service, because they know what kind of bill they can expect at the end of the month.
If you can design a system that protects the consumer from unforeseen expences and also protects the consumer from the fear of unforeseen expences (get it?), I believe that a micropayment system could be possible.
Disclaimer: My company is involved in this business and I have been working on a product that enables micropayments.
kiravuo
The primary problem is that it is very difficult to create a financially profitable micropayment system for the operator. If you look at banks (in Finland we have a very efficient direct bank transfer system, top of the world, not cheques) and credit unions, they can not really handle anything less than several euros. Telcos are actually the most skilled profit makers on small transactions, but even their limit is around 10 - 30 cents.
It is possible to push the cost of profitable transaction lower, but it is not trivial. The proposed micropayment systems have usually focused more on technology than finance or customer acceptance.
The second issue is are people willing to accept the system. That is market psychology. Personally, I think that people are willing to pay even small amounts, but it has to be transparent and consumers must be protected from unforeseen charges. Most people pay for electricity and telephone per usage without thinking about it every time they use the service, because they know what kind of bill they can expect at the end of the month.
If you can design a system that protects the consumer from unforeseen expences and also protects the consumer from the fear of unforeseen expences (get it?), I believe that a micropayment system could be possible.
Disclaimer: My company is involved in this business and I have been working on a product that enables micropayments.
kiravuo
