How do you define a micropayment?
In the early days of the Web a micropayment was defined as 1/1000th of a US dollar. With the Internet providing a shop-front for the sale of small value items - such as a software application or an individual news story - the search was on for an economically
viable means of conducting such miniscule transactions.
But what if we got the price point wrong? Rather than setting the bar as low as $0.001 why not raise the price to a point that more closely matches consumer expectations of value. Metaphorically, when browsing online I might put my hand in my pocket for
50 pence, but anything less than that has me wondering whether it's worth the hassle.
That 50 pence price point correlates closely to Apple's pricing of music downloads through iTunes. In January 2006 the music download average for iTunes was 17.56 million per week.
And now we
hear from Steve Jobs that the company is experiencing sales of roughly $1 million per day from the iPhone app store, equating to around $30 million in the month since the app store first opened its doors for business. The average price point? $0.99.
It strikes me that anyone searching for a working example of micropayments in action need no look no further their own iTunes account.