Until payment processing is an inherent feature of the monetary system, rather than through multiple third parties, small transactions like these are just bad for everyone.
Only make the really cheap plans available as annual subscriptions. Charging $3/month isn't very viable, but I bet $36/year is. (Assuming that the costs of providing the service itself permit that.)
Attempting to do both increases the complexity of your pricing scheme, and that translates to abandoned and lost sales. At least, that was my understanding of the reasoning.
I could see creating a tier chart for the different levels of service with "monthly" and "annual" price columns, where the monthly column is crossed out for certain tiers.
But I'm not a marketing person.
Pretty much anything that is remotely considered a barrier to your sign up or checkout process costs you sales; having questions or needing to spend time deciding which position on a chart you want to purchase from is time you are giving people to decide maybe they don't actually want to sign up.
Presumably they think more people would pay a higher amount than walk away because they don’t offer a lower amount? or that people who want to pay for smaller space are more likely to use it, or become less attached to the account and more likely to be less loyal and shop around, or don’t want to support the increased complexity...
Card fees would presumably be more of an issue for flat rate $/gb but I don’t think they they are that zero-margin?
I find it interesting, because EFTPOS (like a debit card in the US) seems to be far-and-away the most popular way to pay for small items and is accepted virtually everywhere.
That's why they offer such great discounts for annual billing. DropBox's cheap plan is $10/month when paid annually, but $12/month if you pay monthly, for example.
There are benefits to cash. And despite the tremendous faults and failures, of a (more-or-less) decentralised payments-processor system. Though one might argue that one in which Visa and Mastercard account for 3/4 of all card-based payments[1], even before accounting for the data "sharing" between payment and credit-scoring entities, fails even harder than even the government-controlled case.
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Notes:
1. https://wallethub.com/edu/cc/market-share-by-credit-card-net...
Unfortunately, with the costs of transaction fees being put on merchants, there's essentially no incentive for customers to get anything other than what is commonly accepted, and so no way for any new entrant to the system that uses a different (or no) processing fee structure. The closest thing to new has been Stripe, and that too has essentially the same structure as the rest.
It is interesting to me that you mention the Post Office- a government run organization that effectively operates independently and probably has less data on you than your phone company. In fact, I suspect an organization set up in a similar manner probably would have the same level of insight and (in theory, if not practice) the same level of privacy for you as Visa or MasterCard.
Then again, if I had a magical fiat wand, I would also allow FedEx and UPS to deliver packages into my mailbox rather than leaving them in the rain and snow, so I can't say that I've worked through all the details of where the right balance between "public good demands a monopoly" and "public control is unwarranted and not likely to be more beneficial".
The problem's a difficult one. More usually, the answer seems to be a mix of bundling and subscriptions.
With technology and all that it entails (protocols, data, interchange, hardware, various forms of IP), that itself is problematic in ways simple print content subscriptions generally weren't.
If you keep the existing rate structure, payment processing represents a ~3% sales tax that yields a huge margin for all players, a tantalizing revenue stream to nationalize.
Id you use the state resources to subsidize the price down to zero, you have a great "pro-business"/"pro-inclusive-economy" plank for political points.
Either way, you get a huge amount of data and a massive lever you can use for political ends. Think of the deplatforming debates of a year or two ago, but magnified by "this is basically the only payment platform used in the country."
The so called Faster Payments System (Система Быстрых Платежей), launched last year, offers instant money transfers in Russia for 0.05-6 rubles (≈$0.01-0.1). Your bank can charge you on top of that, but i.e. in my bank it totally free (subsidized by other services).
Now (since autumn) they are slowly launching payments system (it's not gained traction yet, but it's just started). Tariff for payment system is 0.4-0.7 for retailers, split between your and retailer's bank.
Afaik, China also has something like that for for years.
I think that USA don't have something like that because political tradition forbids government to compete with established private services. I have read that Americans have to buy commercial software for filing taxes. :-) In Russia, it would be unbelievable — you just using government provided tax filing software free of charge.
Personally, I would much prefer that our legislators simplified the tax code to the point that specialist preparers and software wasn't necessary, but all of the incentives around elections pretty much guarantee that won't happen.
Outside the U.S. there are differences in payment system. Here in Germany we have working wire transfers for most things working fine. However that system lacks online authorization ... only in 2015 German banks started their PayPal copy PayDirekt, which however fails to attract vendors and users, to a degree due to hen and egg issues and to some degree due to competition law issues (such a cooperation between banks might for a cartell, thus they've built a complicated structure)
Government can't really regulate this much, unless they want to rule prices completely.
Edit: yup, tips: https://www.ecb.europa.eu/paym/target/tips/html/index.en.htm...
Alas, the 90s hit and these banks, along with the energy companies, the cable companies and the postal company, were privatized. Innovation ground to a halt and service quality plummeted. In the end, they had to be bailed out during the 2008 financial crisis.