At first he says that most online purchases are too big to really be considered "micropayments." Well, duh -- there's no micropayment infrastructure, so no true micropayments.
Exactly. There is no data in his argument - you can argue that people wouldn't want to pay a little versus nothing but how can you know? There is no real opportunity to test this on the Internet. In real life, there are people who make a living from busking, which implies that there is no universal psychological barrier to tossing a quarter in a tin can for a snatch of a tune that put a smile on your face. (You can argue that there are people who never give to buskers, but that is not really the issue).
As for the transaction cost - well indeed, this is why the micropayment problem has not been solved. This isn't really my field, but I imagine the way forward is to somehow "warehouse" and broker payments until they are no longer "micro". For example if I make 10 micropayements of $0.25 to 10 different recipients, i am debited $2.50 once, and all that debit goes to one recipient, with everybody else's money shuffled around until all recipients ultimately get their money in as few transactions as possible. Nobody said it is an easy problem to solve.
> For example if I make 10 micropayements of $0.25 to 10 different recipients, i am debited $2.50 once, and all that debit goes to one recipient, with everybody else's money shuffled around until all recipients ultimately get their money in as few transactions as possible.
You know what banks are doing? That's exactly how they operate transfers. Only it seems, not cheap enough. (However, almost every bank in Germany allows you to make transfers to people with accounts at other domestic banks for free. Since ages. It's just not convenient.)
Definitely shouldn't be easy. Whichever company goes big time with micropayments in the next decade is sure to become a multi-billion dollar company (I'm positive Paypal is worth that much).
Exactly. There is no data in his argument - you can argue that people wouldn't want to pay a little versus nothing but how can you know? There is no real opportunity to test this on the Internet. In real life, there are people who make a living from busking, which implies that there is no universal psychological barrier to tossing a quarter in a tin can for a snatch of a tune that put a smile on your face. (You can argue that there are people who never give to buskers, but that is not really the issue).
As for the transaction cost - well indeed, this is why the micropayment problem has not been solved. This isn't really my field, but I imagine the way forward is to somehow "warehouse" and broker payments until they are no longer "micro". For example if I make 10 micropayements of $0.25 to 10 different recipients, i am debited $2.50 once, and all that debit goes to one recipient, with everybody else's money shuffled around until all recipients ultimately get their money in as few transactions as possible. Nobody said it is an easy problem to solve.