Micropayments: an idea whose time has passed twice?

Abstract

During the dot-com boom, many predicted that micropayments would soon let Web sites sell all sorts of things individually. People could buy magazines article by article, or music a bar at a time, if they wanted. In 1998, Jakob Nielsen wrote that most sites that are not financed through traditional product sales will move to micropayments in less than two years. MIT's Nicholas Negro-ponte predicted the same year that you're going to see, within the next year, an extraordinary movement on the Web of systems for micropayments. Well, not much happened. Payments of less than $5 generated 1 percent of online content sales in 2002, adding up to only US$9.6 million. Many small sites have either disappeared or given up on attempts to charge, and many useful Web sites still don't have a straightforward way to support themselves. As advertising stopped being the magic solution for Web business plans, however, some entrepreneurs took another look at small-scale payment schemes.