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Summary:

Saul Hansell in an blog post article for The New York Times today wonders why iPhone users are ready to pay for content. His conclusion? “Apple has created an environment that makes buying digital goods easy and common.” We concur! In a guest column for us, […]

Saul Hansell in an blog post article for The New York Times today wonders why iPhone users are ready to pay for content. His conclusion? “Apple has created an environment that makes buying digital goods easy and common.” We concur! In a guest column for us, Narendra Rocherolle wrote about a new class of software “….that I call “impulseware” — cheap enough and easy enough to buy on a whim. I would be spending a lot more if Apple extended the API to allow for the ability to transact within apps.” Nothing like buying a song, an application or a ringtone with a simple click, only to be billed in a batch, later. Such buying habits are the reason why we believe Apple’s iPhone could prove to be an ideal micropayments platform.

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  1. It’s true, I am always amazing that Apple can transaction a 1.99 TV show or .99c song using my credit card. I assume that they have tremendous power over that credit card companies and have negotiated what could be the lowest rates in the industry.
    This gives Apple tremendous ability to corner the market for micropayments… after all I dont know how much I give to them each year but I have a disk full of music and video.

  2. Om, there is evidence that the authors of this ‘impulseware” are getting paid but most of them aren’t making any profits because a dollar here and a dollar there doesn’t cover their development cost. (Yet another example of the long tail where only the distributor profits.) Is this a healthy marketplace or a scam?

    Maybe it is just the App Store and not the concept of micropayments that is broken, since I hear the “free” MMOs are profiting from micropayments.

  3. OM-

    The word micropayment never really found a definition premised on a business case. It is nothing more than a buzz word – the only form of payments for digital goods that can work efficiently is the carriers billing systems (but of course they are too greedy for their own good – at least for now).

    In Apple’s case – they have managed to play the “authorization cycles” efficiently – to reduce their clearing costs (and the success of Apple’s “own” content services keeps this way of processing payments at a cost that makes for a business case). And given their volume eventually negotiated better processing fees. I doubt very much Apple will open up their API’s – it just does not make sense for Apple to be in that business and disrupt their way of processing. I won’t get into the real operating issues with being a payment platform – thats a debate for another time.

    People seem to forget – Apple never tried to implement a so-called micropayment platform for iTunes (from launch to present). Reason – Steve was too smart to fall for these buzz words – took the simple, straightforward route to the payment processing (even though former Apple evangelist Guy Kawasaki fought on that frontier with his thesis defense on micropayments launching BitPass – ashes to ashes – dust to dust).

    We should get away from this “micropayment” label as everything goes digital – the media is still trying to resurrect “micro” – looking for the lazarus man. They seem to forget – payment was micro – before micro became payment. Payment processing is not about technology – but about the biz considerations and operating issues (one which Apple has managed mastered by delivering their “own” digital services).

  4. Micropayment: Wie mobile Applikationen die Internetwirtschaft verändern können » netzwertig.com Wednesday, March 4, 2009

    [...] Wer jetzt genau aufgepasst hat, der wird vielleicht gemerkt haben, was ich hier gerade beschrieben habe: ein (annähernd) perfektes System für Micropayments. Woran es im “herkömmlichen” Internet bisher mangelte – nämlich ein simpler, allgemein akzeptierter und für alle involvierten Parteien lohnenswerter Weg, Kleinstbeträge zu verrechnen, ist mit iPhone und anderen Smartphones in greifbare Nähe gerückt. [...]

  5. Learning the right lessons from iTunes | Prodigeek Friday, March 6, 2009

    [...] is not an example of micropayments, like some would like us to believe.  As newspaper’s desperately try to convince the public content should [...]

  6. Can Apple Please Kick-start Micropayments? – Ryan Boswell Sunday, August 23, 2009

    [...] Apple added a Micropayments application for the iPhone they could open the floodgates for thousands of users to start spending [...]

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