Micropayments for Web Services? Russ Jones of Glenbrook Partners (with a lot of first-hand experience) takes aim at micropayments. "To say we're skeptical about micropayments would be an understatement."
But to date, most micropayment systems have been used with the delivery of content (not services) over the World Wide Web. They have been based on the assumption that consumers would pay small amounts—from fractions of a penny to perhaps a few dollars—for the right to view and optionally download web-based information or software. The challenge, of course, is that it can cost more to collect such amounts than is worthwhile. Most solutions have been based on the aggregation of multiple small accounts, which in turn requires that the micropayment vendor be associated with enough volume and sources of content that aggregation is economically feasible. No micropayment aggregator has come close to achieving this critical mass.
The economics change, however, when micropayments are used for services rather than for content. It's one thing to charge a few pennies to view a document, particularly when consumers may only view one or two documents per month. But in the business-to-business world of web services—where requestors are more likely to use those services more frequently—the aggregated revenues per requestor will be greater. Micropayments may finally succeed for web services where they failed for content. [Source: Loosely Coupled--The Missing Pieces of Web Services]
Posted Wednesday, January 22, 2003 6:59:29 AM