Amazon is beta-testing a new payment service that will take the e-tailer into Google Checkout and PayPal territory.
Could micropayments for text and videos—perhaps even blog articles and by-the-chapter books—be on the way? I’m surprised people aren’t discussing the possibilities.
If the charge were a cent, Amazon might take just 0.0025 of that as a transaction fee. Better yet, customers could combine small transactions into a single one and save on fees, using prepaid or postpaid methods.
Similar to iTunes: Way to help finance blogs?
The prepaid idea might be similar to buying a $10 card for iTunes. Once you prepaid the amount, it would be added to your account and then can be used up in small increments.
Such an approach might help finance online magazine-style blogs such as TeleRead—providing an alternative to the ad model. A blog article might cost one cent, and you could set both a monthly maximum and a daily limit. Possibilities:
–Buy no more than five articles per day.
–Impose a monthly limit of $1.50.
It would be like a subscription, but better—you wouldn’t pay for material you didn’t use.
Pay-per-chapter books
Micropayments could enable models like pay-per-chapter books—something like DailyLit—or even pay-per-page arrangements where the user could be granted the entire book after reaching a limit.
Other possibilities, such as cookbooks and encyclopedias
Also think about reference books, cook books, encyclopedias. Readers could buy articles rather than saddle themselves with subscription.
Encyclopedia Britannica, free when it appeared online, now costs $69.95 a year. If a student wants just one or two articles she won’t subscribe. A 30-day free subscription is a hassle and not really a good solution for either party. But micropayments would be a good deal.
CNN
Another example is CNN, which tried to charge for online videos by requiring subscriptions. It didn’t work. Now the videos are free again, but in the future…
One of the problems with digital content is that you don’t want to pay for it before you see it, but once you see it, an item is sort of yours already, since you downloaded it.
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Comments of Robert Nagle (temporarily, at least, missing from the comment area—the reason we’re reproducing them here): Fees: For Transactions < $10: * 1.5% + $0.01 for Amazon Payments balance transfers, * 2.0% + $0.05 for bank account debits, * 5.0% + $0.05 for credit card. (US customers only; non-US customers pay an additional percentage on the credit transaction).
This compares to 2.9% + $.30 for amazon honor system payments (the donation model). for a one dollar payment under the new payment plan, the fees would be 10 cents, bringing a 90 cent profit. (Amazon honor system fees would be 33 cents, bringing a 67 cent profit).
For comparison’s sake, paypal’s base transaction fees also is 2.9% + 30 cents (3.9% + 30 cents for transactions outside the US).
