Best: Micropayments fail because decision fatigue outweighs small transaction amounts
Chris Best · 20VC: Substack Founder Chris Best on The Future of Public Journalism, Why The Economics Of Attention Have Been Flipped & Why Micropayments For Content Will Not Work · Jun 12, 2020 · at 12:35
Chris Best is the founder and CEO of Substack. He discusses why micropayments fail as a monetization model for digital journalism.
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“I think that micropayments, as we sort of traditionally think of them as like, I'm going to quickly decide whether I want to spend 20 cents unlocking this thing, just don't work on sort of a fundamental product level. I think when you decide to pay for something, there's sort of two components of the pain that come with that. Part of it is like the financial pain of like, I'm parting with this much money, and part of it is just the decision pain of being put to a decision and trying to make a good choice about, do I want to spend on this thing? Do I want to think about spending this? And as the amount of money in a transaction goes down, as it does in a micropayment, you end up in a place where that sort of like decision pain kind of dominates the equation. And so you're like maximizing pain and minimizing the amount of money you're actually getting out the other side. And it just ends up being, it doesn't work. It's not a pleasant experience.”
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