Mark Minasi writes a compelling new argument for micropayments in WindowsITPro. If micropayments were to become more pervasive and simple to use, they might effectively eliminate some - or much - of the current ad-based approach to online content. On the other hand, it would certainly not be something online ad companies - Google, particularly - might embrace too willingly.    [click here]     (WindowsITPro)

With all the recent fuss about eBay's new changes and the ripple effect on its subsidiary, PayPal, there are a lot of new articles coming out on the inner workings of this 800-pound gorilla in the online payments space. Fortune Magazine's Small Business examines what PayPal does with your money.    [click here]     (Fortune Small Business)

Clay Shirky, an adjunct professor at the University of New York, wrote a paper entitled 'The Case Against Micropayments' in which he makes his case for why micropayments will not work. The short version of his theory? "Users hate them." An interesting argument for a process that few people have even encountered let alone use. Perhaps his statement should have said, "Users may hate them." My simple counter to that concept is that you could also make a similar statement that "Users hate pocket change." or "Users hate dollar bills." First of all, if that were the case, we would have gotten rid of pennies long ago. Or dollar bills. And all because "users hate pocket change." Pocket change and dollar bills are useful because, of course, the market dictates that there are still items enough consumers will still pay for with small change from their pockets. (I wonder if Shirky carried packet change around in HIS pocket?). Still, I'd agree that at this point, nothing has been introduced into the marketplace that makes the transaction as simple and seamless as reaching into your pocket for change to pay for that newspaper.    [click here]     (openP2P)

SAN FRANCISCO, Aug. 26 — The idea of micropayments — charging Web users tiny amounts of money for single pieces of online content — was essentially put to sleep toward the end of the dot-com boom. In December 2000, Clay Shirky, an adjunct professor in New York University’s interactive telecommunications program, wrote a manifesto that people still cite whenever someone suggests resurrecting the idea. Micropayments will never work, he wrote, mainly because “users hate them.” To continue reading the article, by click on the link.    [click here]     (New York Times)

Looks like the Law of Unintended Consequences is kicking in when you read this very recent post on the Cossacks News Blog. The piece proposes that micropayments are actually already here and in pervasive use. But not in the ways we may have expected. The author cites Clay Shirky's 2000 manifesto (I'll post a link to that shortly) on why micropayments will never gain wide acceptance, citing the failure of numerous players over the years: BitPass, Peppercoin, Digicash and Cybercash to name a few. Cost of transactions are cited as one of the major hurdles with fees charged by the credit card companies among the biggest challenges. A good read.    [click here]     (Cossacks Breaking News Blog)

In a limited Beta Release, it looks like Amazon is experimenting with enabling various payment options through its Amazon Flexible Payments Service (Amazon FPS). From their own description page: "The set of web services APIs allows the movement of money between any two entities, humans or computers. It is built on top of Amazon's reliable and scalable payment infrastructure."    [click here]     (Amazon Web Services)

Electronic Arts, one of the oldest and most successful gaming companies, has recently adopted a free gaming approach in selling their online games. This model has been in use for a while overseas and marks the validation a new business model on the part of game producers. Instead of selling the games - which generates a high volume of pirating - the game companies instead make their money selling add-ons like weapons, clothing or special abilities to enhance your character's features. At a dollar or two a pop, it doesn't take long to recover development costs from gamers with the added bonus of ensuring loyalty from players who have now invested so much into their individual avatars over time. While it's not exactly a real micropayment play, this emerging market bears attention, playing on the old Gillette razors-and-razor-blades marketing strategy: Give away the razor and sell the blades. Unfortunately, Apple still hasn't quite figured that model out yet, still insisting on giving away the razor blades (iTunes) at little or no profit while trying to sell their razors at high margins (iPods).    [click here]     (VTOReality)

With the rise of pay-as-you-go content, there’s light at the end of the digital pipe for micro-payments.    [click here]     (Red Herring)