Who killed the micropayment? A history.

30 years into the web’s history, micropayments still aren’t a part of our daily lives. It’s one of the great unsolved mysteries — why didn’t this promising system take off, and who, if anyone, is responsible for its early demise?

As the world wide web soared in the 1990s, many of the systems envisioned by its early architects saw rapid development. But micropayments, which had once been described as an essential nutrient for any web system, seemed to be dead in the water.

The Missing Middle — Micropayments could power a previously un-monetized category of creative content on the web
Image Credit: Coil

Micropayments in the 1960s

The term “micropayment” was coined by Ted Nelson in 1960. Nelson is a major figure in early network development, who came up with much of the concepts and vocabulary which would become central to web development.

Ted Nelson coined the term micropayment in the 60s

NSFNET — A Brief History of the Web before the Web

In the 70s and 80s, there were a series of early prototype networks: ARPANET, TCP/IP, and others. But since these were not designed for commercial traffic, there was no room for experimenting with micropayments.

T1 NSFNET Backbone, c. 1991
402 Payment Required —before web monetization stories, this code was declared and reserved for future use

WORLD WIDE WEB CONSORTIUM

The World Wide Web Consortium (W3C) is an international community that develops open standards to ensure the long-term growth of the Web

Carnegie Mellon’s NETBILL PROJECT

In 1997, Carnegie Mellon financed the Netbill research project, with a focus on distributed transactions — operations performed across two or more data repositories.

GOVWORKS

The 2001 documentary “Startup.com” paints an accurate picture of the climate in the late 90s. It focused on the 1998 startup govWorks, Inc., a company with a visionary idea of creating a universal system allowing citizens to pay for power bills, parking tickets, and public services online.

THE GOLD RUSH

By 1999, even large tech players like Compaq and IBM were trying their hands at micropayments.

THE SKEPTICS — ANDREW ODLYZKO & CLAY SHIRKY

Even considering some of these early misfires, it’s hard for those of us who are interested in micropayments to understand why they wouldn’t have caught on in the 90s.

Andrew Odlyzko giving a presentation at Kent State, 10 October 2014.
Clay Shirky

THE REBIRTH OF MICROPAYMENTS

When elevators were introduced, it created a whole new job market for elevator operators. The idea that passengers would press the buttons themselves didn’t come about until operators went on strike.

Design advocate, speaker and author of Calm Technology. Research Fellow at Mozilla Foundation, Advisor at Puma Browser and Unlock Protocol.