| I don't know firsthand, but to guess: The problem is not so much the computational resources. It's the other resources, especially the human resources required to deal with exceptional conditions. One common exceptional condition is fraud: Either the buyers will try to cheat you, or the vendors will try to cheat you, or certain buyers and vendors will get together and conspire to cheat you -- by, say, laundering money through your operation, which will be a problem for you when the IRS and the FBI come to audit your books. Every transaction has a failure rate, and with such tiny transactions it takes a very low failure rate to destroy your margins. If one out of every ten thousand 1 cent transactions is fraudulent, or gets disputed and charged back by the customer, or fails verification, or sets off a fraud warning at someone's bank... and the resulting exception ends up costing more than $10 worth of time and resources to fix, that's 10 percent of the gross. Here's another random fact: In the USA it now costs 44 cents to mail a first class letter weighing up to 1 ounce. That will typically allow you to mail 4 or 5 sheets of paper. Which means that it costs of order 10 cents just to mail a sheet of paper. One of my double-sided credit card bills seems to hold about 40 transactions, which implies that it costs about one-quarter of a cent just to mail the paper report of a single transaction. If the average transaction is for a couple of cents... the mailing costs to the credit card company are somewhere around 12.5% of the gross. That's just one random example of a cost that doesn't scale uniformly downwards as transaction size goes down. There are many others. The cost of a transaction just isn't proportional to its size. Obviously you can mark up a transaction enough to make it worthwhile. But if that markup is very high, your 2-cent-per-article micropayments operation will end up with a huge competitive disadvantage against someone who collects up articles into bundles and then sells the bundles for $1.99 apiece -- or, better yet, an annual payment of $23.99. We call those people publishers and editors. |