I want to believe in micropayments.
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micropaymentheart.pngI want to believe in micropayments.

It’s like Santa Claus, the tooth fairy, the economic stimulus package, predefined timelines for large projects, nonfat lattes, and God. I want to believe in micropayments because it gives me hope

I’m talking about hope that we’re on the right track. Hope that we have a viable, sustainable alternate plan for the business models we’re turning upside down with our new technology. Hope that we can decentralize power without losing it altogether. Hope that we can survive without the monopolies. Hope that artists will be able make a living just by inspiring people. Hope that the average Internet user will soon derive as much satisfaction from giving financial props to someone they find valuable as they’d get from buying them a beer.

I naively believed we were close to this reality because someone — iTunes — is actually finally doing it well. I believed the biggest barrier was form of payment: if you have to enter your credit card number or go to a separate payment website or do anything that takes more than a click or a few keystrokes, the method won’t catch on.  iTunes broke that barrier for iPhone users when they required us to sign up for an iTunes account (and enter our credit card number in advance) just to download those nifty free apps. We didn’t like entering our credit card number, but it was Apple, so we knew everything was gonna be okay. Now that we’ve done it, whenever we get a song stuck in our heads at 3 AM and decide we need to listen to it right then, all we have to do is enter a password and it’s ours for 99 cents. A password. Just a password!  Anywhere we are.  It’s brilliant.

It was so easy to take it a step further: if Apple can do it, other industries can’t be too far behind.  Heck, we could even let Apple become the new PayPal and run all of our micropayments throught them, since they already have our trust.  Why not?  Let independent artists have their own merchant accounts.  Expand the system to cover writers, filmmakers, painters, and photographers.  Let high school kids make 50 cents each time one of the cool screen savers they create is downloaded.  Let me pay for shareware incrementally based on the number of times I use it.  Let me donate to a nonprofit in small chunks whenever they inspire or move me.  Empower the bloggers to fund each other.  Make it easy for us to put our money where our hearts are.  

I was this close to swallowing the whole story of technological utopia when Clay Shirky — in his infinite clarity — shot it down this morning.

“The essential thing to understand about small payments is that users don’t like being nickel-and-dimed. We have the phrase ‘nickel-and-dimed’ because this dislike is both general and strong.”

So… people don’t like micropayments.  Oh. Right.  (And… now that I think about it, yeah okay, I kinda hate them, too.)


“The lesson of iTunes et al (indeed, the only real lesson of small payment systems generally) is that if you want something that doesn’t survive contact with the market, you can’t let it have contact with the market.  …small payments survive in the absence of a market for other legal options.”

So… iTunes is an aberration that only works because the music industry is kinda screwed up at the moment.

He ends with:

“We should be talking about new models for employing reporters rather than resuscitating old models for employing publishers; the longer we waste fantasizing about magic solutions for the latter problem, the less time we have to figure out real solutions to the former one.”

But Clay!  I wasn’t talking about employing publishers! I want the micropayments to go directly to the reporters!

But okay… fine… you win.  It won’t work for that, either.

So what’s our Plan B?

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11 Responses to “I want to believe in micropayments.”

  1. Mark Dixon Says:

    But that’s what we’ve all been trying to figure out for a long time, isn’t it? Plan A was bricks and mortar, and ink on dead trees. What IS our Plan B?

  2. e Says:

    a middle-man, of course. someone to gather some chits and periodically disgorge some bucks. there is nothing new under the sun, you know,

  3. Emma McCreary Says:

    I think we just need the right metaphor, system, and cultural support.

    There is a system already in place, that both average and abnormal people use every single day, that is culturally expected and approved, that gives small amounts of money directly to the people providing the service right at the time they provide it with no middleman at all.

    It’s called tipping.

    Maybe we need to culturally learn to think of art and creativity as kind of a *service* rather than just a *product*.

    The right system could do that. It could reframe how we think of creativity.

    Second, the reason people hate micropayments (the reason I do anyway), is that I don’t like having 100 tiny transactions on my bank statement that I then have to reconcile.

    But if the system was the sort of thing you auto-funded, say, $25 or $50 in every month, and then you just deducted each small payment from your balance, that would eliminate that.

    But what would get people to do it? To like it? To expect it?


    People don’t tip because it gives them warm fuzzy feelings. People tip because if you don’t you feel cheap. It’s a cultural rule.

    Right now, the cultural rule of the internet is Things Should Be Free. If we changed that to Creativity Is A Service And Deserves Tipping, a good system would emerge and take off.

    I don’t think the problem is in the technology. It’s in what we value, as a culture. As an internet culture. To make micropayments go, we’d need to let go of the Holy Notion of open source, creative commons, and “make it free and you will be popular” being the only righteous way to offer your creative goods to the public.

    Not that I’m knocking open source. I think it’s awesome, and I think we can have both. But if payment is no longer the gateway to owning/using the product, it has to be a culturally expected practice to give something back to the creator in gratitude for their effort.

    And as it becomes that, the right system will get worked out to support it.


    And ummmm…on an entirely different note, God isn’t supposed to give you hope. Believing in God as an abstract concept in that hopes that God will somehow lesson some kind of present or future pain misses the point of spirituality completely. God isn’t a being who is going to intercede on your behalf if you believe hard enough. God is the interconnectedness in everything – God is the pain and the pleasure, the magic and the mystery inherent in all things.

    Hope, on the whole, is an avoidance of reality. Which is the opposite of the purpose of spirituality. Spirituality is about facing, sinking into, and embracing the present moment. It’s about feeling larger wheels turning in the world as we inexorably evolve into more conscious beings who will recognize and understand the value and purpose of creativity and want to give reciprocally when we benefit from it.

    Similarly, “believing in” the economic stimulus package misses the underlying basis of reality, on which we can rest a more enduring faith: that whether or not the package works the way we want it to, life will still be here, the world will still be here, and economies will go marching on. The joy and wonder of creation goes nowhere when the economy tanks, we just stop noticing it. But we don’t have to. We all have the choice, in every moment, to sink into the stillness that moves under the chaos, giving life and voice to the whole of creation. But the point is not to have “hope” – a state of feeling attached to an imaginary future. The point is to experience transcendence and grace right now in the present moment. And then do what you feel called to do to express the aliveness inside you. And feeling yourself doing that, you know that God is moving through you.

    (OK, I just couldn’t let it lie there! You were equating God with Santa Claus and the Tooth Fairy!).


  4. Mark Dixon Says:

    Emma said “say $25 or $50 every month, and then you just deducted each small payment from your balance”.

    That’s an interesting idea, like a Starbucks card for media content and other small-payment online services. On the other end, the service would pay content providers and serve the purpose the other poster was taking about, the “middleman to gather the chits and periodically disgorge some bucks.”

    Or am I still missing the whole point?

  5. sarah Says:

    Just a side-smile to Emma: you do know I have much-more-complex-than-is-jokingly-represented-here understandings of Santa Claus, the tooth fairy, the economic stimulus package, predefined timelines for large projects, nonfat lattes, and God, right?

  6. Emma McCreary Says:

    LOL, yes. I know.
    But you know, just for posterity and the general public, I had to pontificate. =)

  7. Mark Dixon Says:

    Of the ones you listed, Sarah, the one I least believe in would be predefined project timelines.

  8. Daniel Widrew Says:

    i am finding this article extremely unconvincing. the only thing keeping itunes out of contact with the market is consumer laziness. there are jillions of free mp3s out there – even legal ones. sure, they may not be the same popular songs on the radio, but so what? apple could try charging only for popular podcasts if it felt like it. maybe people would be willing to pay, or maybe they’d go out and find a new one to listen to. if people get sick of paying itunes, they’ll find new places to get music (as many many already do). nickel-and-diming is charging for small services on top of the main access fee. hotel minibars are nickel-and-diming. if staying at the hotel was free, but you had to pay if you wanted to use a room, or the bed, or the shower, that wouldn’t be nickel-and-diming, that would be a la carte. and yes there absoultely definitely ARE examples of micropayments working. sure, most attempts fail, but most traditional newspapers, record labels, etc fail as well. most things fail. that says little about the underlying system.

  9. Alan Bostick Says:

    I don’t shop at the iTunes Music Store. The reason I don’t has nothing to do with micropayments and everything to do with the fact that the music is in a proprietary format that won’t play on my MP3 player. (In fact, the latest version of iTunes bombs out when I connect my MP3 player. Thanks a lot, Apple.)

    Here’s a key issue with micropayments that Clay Shirky alludes to but doesn’t directly address. When I access a Web article and my account on PayTheNobleCreator.org is deducted 23/87ths of a cent, can I forward that article to my friends who don’t have accounts on PayTheNobleCreator.org? Can I link to it on my blog so that anyone can read it?

    And even supposing PayTheNobleCreator.org takes off, it’s only a matter of time before SocietyoftheSpectacle.com starts horning in on the market for micropayments, signing up the big media sites while making itself next to impossible to use by independent creators, and using network effects to be the dominant micropayment provider. That’s the way of capitalism: to vigorously and persistently remake the institutions of creative exchange so that creators become the chattels of those institutions.

    By the way, resistance to nickel-and-diming is pretty much an American phenomenon, as I discovered traveling in Australia and discovered that I had to pay for the breadbasket and my glass of water in restaurants.

  10. Lawrence Says:

    Micropayments are petty; regular payments are not.

  11. Alex Says:

    In my opinion, the only reason the micropayment system works so well for itunes is that people trust them to not steal their credit card information. The fact that its just $.99 a song fuels their impulse driven purchasing, the thought that “maybe i shouldnt buy this online with a credit card” doesnt even cross their minds because the apple store is safe. For the micropayment system to work for other less “safe” sites the buyer has to trust that he isnt just dumping his credit card information online where anyone can grab it up. The solution for these websites is to use a company like OneTouch Online Purchasing where you can charge whatever you download to a trusted source like a cellphone service provider or an ISP. The buyer doesnt have to worry about phishing and fraud scams because he isnt putting any secure information online. Companies like OneTouch Online Purchasing is to digital content providers and customers as the apple app store is to its own customers, a trusted site where one can buy media online without having to worry about any consequences (other than the amount of their monthly bill)