Where smaller might be better
By Billie Andersen
Nanopayments (the idea of making a profit by getting a large number of people to pay a small amount) have been talked about for a while now, and although not in their current form, the idea of nanopayments is not a new one.
For example, it is the way that mobile operators make a profit off text messaging, and remember the Million Dollar Homepage? A student from Wiltshire sold a million pixels’ worth of 100-pixel blocks, which companies could purchase and advertise on at $1 per pixel. However, the deployment of this type of payment to general consumers within the online sphere is relatively new. At the moment, for example it is used on social networking sites to buy items such as virtual gifts or in games to buy extra levels.
In Asia, companies such as TenCent and Cyworld are bringing in large sums of money through nanopayments, which are paid for either online, through mobile bills, or the online currency is purchased for cash in shops. The limits to the use of this type of revenue model is not yet known, especially when placed in contest with the ad-supported model, but it has sparked an interesting debate. For instance, there has been a lot of discussion in the press about whether or not small payments could be used to help fund online news sites by charging for access to content. There have also been discussions about providing users with the choice over whether or not to pay for content, while educating them as to why they should. It is up for debate over whether users will pay for information in a format that has historically been free, or whether they would be likely to make what could be seen as donations to news sites.
As more and more people become interested in this technology and try to cash in on it, it will be interesting to find out what users will be willing to pay for and what they will not. This will depend on the perceived value of what they are being asked to pay for, no matter how small, and very importantly the usability of the method of payment.