+ It is economical as low as 3 cents an action.
+ It solved the "Customers hate to make micropurchasing decisions" by moving the payment from the end-user to a business which gets to automate the micropurchasing.
+ The micropurchases are actually billed macro-scale, so it works on top of our existing payment infrastructure without too many hassles.
+ You can deploy it anywhere in the world for trivial levels of integration work. (That won't maximize income by a long shot, but you'll start accruing earnings with a quick copy/paste.)
+ It is almost totally resistant to "steal the content and repost to avoid the pay wall"... well, when it doesn't pay for people to steal the content, but that is another discussion altogether...
You are probably right that adwords / adsense obviates the need for many micropayments, but to truly become a micropayment worthy system there would have to be a much larger degree of transparency.
Basically right now you have to assume the middle man isn't taking advantage of your not knowing how much is being paid for your inventory and that is a thing that people are not happy about in general.
The end user doesn't fork any dosh, and you don't get anything unless you're get a slice of a corporate adwords referreral program.
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Maybe if the Newscorp paywall takes hold (the egg in chicken'n'egg) then Newscorp could institute a micropayment service 3rd party people (us/we) could use.
Newscorp might like a 0.1% tariff on all micropayments, and if there is one person who could take on Visa/Mastercard it is Rupert Murdoch
There are several reasons for this:
Micropayment services tend to be wallet oriented, pre-paid and therefore there exists no direct relationship between the merchant and the customer. This relationship is a very important component for the merchant.
Micropayment services tend to suffer from a chicken-and-the-egg issue, if not enough sites use a common system then why would a consumer put their money in to that particular wallet.
To date, in spite of many 10's of millions of investment money sunk in micropayment systems there has never been a clear winner, the minimum charge seems to be stuck at roughly $.80 which is way too high to qualify as a micropayment, and a merchant would only see a very small fraction of that.
To really function a micropayment system would have to be able to seamlessly charge sub-cent amounts and put the majority of that in to the hands of the merchant within two weeks of incurring the charge.