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.)

And…

“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?