‘An EZ Pass’ for Journalism: Why Paygo says Micropayments Are the Industry’s Future

‘An EZ Pass’ for Journalism: Why Paygo says Micropayments Are the Industry’s Future

If you’ve ever driven in Florida, Illinois, and Texas, you know the joys of open-road toll systems. You pay the toll without the need to brake, or even stop. One company is hoping to bring a similar idea to online journalism.

Paygo Media will allow publishers to attract a broader range of customers while also discouraging customers from accessing content by nefarious means. Readers will be rewarded with an easy way to read or view whatever content they like. Dubbed “an EZ pass for reading content,” Paygo Media will remove hurdles that non-subscribers currently encounter.

The Paygo model serves as a “skeleton key” for opening paywalls, broadening access to a richer variety of high-quality news sources. Consumers are charged micropayments -- cents or even fractions of a cent -- for each story they view, rather than subscribing or circumventing a paywall.

Paygo: A pay-as-you-go model

For decades, news organizations have relied on advertising or subscriptions. Those business models have proven to be problematic in recent years. In fact, more than one in five newspapers in the U.S. closed in a 15-year span through 2019, according to research by the University of North Carolina’s School of Media and Journalism.

Paygo offers a new revenue model: Consumers are charged directly for the content they want, and the news organization benefits because it can build an audience with its users. Here’s how Paygo will work:

  • A user signs up for a Paygo account by depositing in their account balance ($3 is an ideal amount, according to user research).
  • While consuming news online, if this user encounters a paywall -- or a site that requires a subscription -- he or she is offered an option to pay just for that article. Paygo will offer one-click access that makes the full article available immediately.
  • Each article the user reads will deduct from his or her balance until it falls to zero. Users can refill their account balance at any time, similar to how they might with the Starbucks app or prepaid cellular and calling cards.

By handling all of the back-end transactions, Paygo offers a seamless experience for the user. It collects money from users for each piece of content they consume, then pays most of that amount to the relevant news organization. The company retains a small percentage of each transaction to cover the credit card transaction costs and the costs of running the service.

The goal, according to Paygo, is to “get out of the way” so the publisher and user can maintain and grow a relationship.

“Brand matters and users should read their content on the publishers’ site,” said Noam Bardin, Paygo founder. “We want to remove the friction of paying several cents for the article, with no need to sign up, subscribe, share your information or any such hassles. The user wants to read an article, not evaluate different offers.”

Breaking bad habits

There’s also a clear benefit for publishers by monetizing content at a price point that seems fractional to the user. In fact, charging just 5 cents for an article could bring in 10 times the revenue compared with advertising, offering a more profitable business model.

What’s more, the Paygo model will discourage some of the existing bad habits that consumers have come to adopt including: stealing content by Googling an article’s title, clearing cookies to circumvent paywalls, or asking someone who’s a subscriber to send a copy of a story.

By granting users access to the right content they want at the right price, and with limited friction, Paygo believes consumers will prefer to pay rather than gathering news by nefarious means. Just look to streaming music and video services for confirmation: Spotify, Apple iTunes, Netflix and others have shown that for the right experience, price and content, users are willing to pay.

Broadening access to journalism

Finally, Paygo Media is focused on the greater good. That’s because ensuring access to a wide range of different publications is critical to maintaining a democracy and upholding freedom of speech.

“We need many different publications to flourish and be profitable enough to remain independent and do what they are great at: deep investigative work, holding the powerful accountable, and giving voice to the weak,” Bardin says. “Limiting the power of politicians and corporations to do as they please and keep the voting population informed and educated.”