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Why do so many micropayment systems fail?

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urlwolf:
hey! That sounds about perfect! (DonationMusician, and DonationBlogger). But isn't it covered by paypal already? Pavlina makes a lot of money out of donations with paypal. You can send as little as you want (er.. microdonations), and there's no big chunk of money you have to deposit first -it's tied to your bank.

justice:
Why Paypal is not any good for microdonations:

http://www.ppcalc.com/


It takes 23 percent of a 1 pound donation.

iphigenie:
there is one place where micropayments work and are successful and that is telephones - you make micropayments but they are totalled into your bill (cellular/mobile or normal phone).  You sign a contract with your mobile phone companies, and then services like ringtones or premium content gets added to your bill then paid on. This works because there is a compelling reason for you to sign the contract (the phone!).

Micropayments online all worked either on prepay or a contract system, but never had a killer app like a phone to coast on - the one exception might be second life.

gjehle:
it has been stated before here i guess but nevertheless
"just because you can pay a small amount doesn't make users want your product"

eg. take the comic strip that was used as an example.
if you start something new that has already been done for free millions of times (web comics) the demand is low.
now if you want users to pay for it from the start, even if it is just 1ct...
if the user can get the satisfaction (reading a comic) elsewhere for less (free) they wont even start reading.
unless of course they want to (well known artist, great (free) story teasers, awesome artwork, whatever makes the producy unique and a must have)

if you have micro donation it implies that you can also get the product without paying up front.
so people use it and if the product is awesome enough for people to notice they might think: well, let's spare a buck for that poor coder.

it doesn't work the other way 'round unless people really, really, really, really want to have it.

in three words: "supply and demand"

micro payment doesn't fail because it's micro payment.
it fails because of other causes, one of the biggest IMHO is a gross misunderstanding or misinterpretation of the system itself.

mouser:
A new (pessimistic) essay by Clay Shirky on micropayment systems:

http://www.shirky.com/weblog/2009/02/why-small-payments-wont-save-publishers/
Nickel-and-dimeing us for access to content made less useful by those very restrictions simply isn’t appealing.
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