What I really want to know is why there are no micropayments currently? Is it just greed on the providers side or some kind of technical limitation? I am not trying to be inflamatory but I am genuinely curious what is holding this back.
Daniel Davies once pointed out that much of the cost of maintaining the credit-card payment infrastructure scales by number of transactions, not their dollar value. It costs just as much for the issuer to process a dispute over a $1 charge as for a $100 charge.
Visa and Mastercard control most of all the credit card transactions in the world and they both charge merchants a percentage (e.g. 1.5%) PLUS a small fixed fee (e.g. 40c). It's that small fixed fee that makes it pointless for $1 transactions cause you just lose too much.
They need to merge the two.... I mean, they spell it out: you're allowed to use 2 separate accounts, one that's cheaper for < $12 and one that's cheaper for > $12.
Obviously they make big money off of payments in the wrong bracket going to the wrong account, but the honest way of doing it and making it work would be to just choose the correct commission rate based on the value of the purchase (donation) made.
