A lot of cool things would be feasible if only apps could get a few cents per user. I assume the reason this hasn't happened is neither lack of intelligence nor lack of trying. So what is keeping micropayments from being a reality? Is it the cost of processing payments? Users are unwilling to pay even a few cents? Something else?
Micropayments need to be treated like pre-paid activities like consuming gas when you drive from one location to another. i.e. the decision to spend money must be automatic based on your behavior. For example, when I drive to the store, I do so without ever thinking "it's going to cost me 14 cents in gas to go there and back. Am I sure I want to go?"<p>For micropayments to work, consumptive behavior needs to be used as a proxy for a decision to purchase.
Transactions costs, minimum payments, infrastructure and complexity. To make a long story short, bitcoin can do micropayments because the transactions costs are very low, highly divisible denomination, straightforward addresses, no definite need for forex, and there is no intermediary financial institution. I think a framework might need to be laid over the top, however.
My guess is that some psychological factors make them impossible to use. Maybe some combination of that bias where most humans won't wait some time for a larger reward later, and the amount of effort it takes to keep track mentally of where you're making a micropayment, and where you're not.<p>I would guess that the closest analogy would be metered long-distance telephone time vs flat-rate. I bet that a significant portion of those going flat rate actually paid more for it than when they were metered.
Processing payments generally involves a minimum per transaction fee that is often too large a percentage of the microtransaction product price itself to make it work. As mentioned by another user, Paypal has a relatively new microtransaction processing service that helps address this problem, though, so there is some progress, at least for microtransactions of a certain size.
Partly psychological: <a href="http://openp2p.com/pub/a/p2p/2000/12/19/micropayments.html" rel="nofollow">http://openp2p.com/pub/a/p2p/2000/12/19/micropayments.html</a><p>Partly technical: You can't do micropayments using credit cards. You can aggregate payments across sites, but there's a chicken-and-egg problem that has prevented payment aggregators from reaching usable scale.
Where do u micro pay for anything in the real world?<p>I think micropayment should be a hidden implementation detail. Users should only have to pay like they do for regular things.