Micropayments aren’t always good to use

If you’re a web publisher or an online merchant and you happen to sell to people who like to pay for small products or services with their phone, their cellphone or even their credit card, you may benefit from micropayments.

The name says: the payments are small and meant to be easy to make, for the user.

For instance, a visitor might come to your MP3 song download service and wish to purchase a particular song for a few bucks so in the micropayment model, he can simply flip out his mobile phone, type an SMS to your site’s code (provided by the micropayment provider, like 123Ticket) and get a code back which, when entered in the web page grants access to the downloadable file for that song. It all happens in a matter of seconds.

Now, while countless customers may appreciate micropayments, they may not always be the right model to use.

As soon as your products of services cost over 12 or 15$US, you should refrain from using micropayments because they’re not meant for those. PayPal may be the solution of choice for amounts up to 10k$US but you can shop around for other payment providers who can be equally competitive.

When your potential customers want predictable and simple pricing, micropayments may end up wasting too much of a user’s mental time by creating many tiny, unpredictable transactions. When this happens, micropayments create both anxiety and confusion in the mind of your visitor. Because of this, you have to be careful not to choose the micropayment model lightly.

Wether you sell your offerings through regular payments or micropayments, you need to make sure that the value proposition is crystal clear so the visitor can decide to purchase (or not) without being anxious about the pricing.

Micropayments are evolving quickly as more people gain access to the web through mobile devices but the people are the ones who decide if a payment occurs, or not. As such, they’re the ones you need to think about when deciding which payment model to implement.