The question is, does it significantly reduce the number of people overstaying on the parking spot? A good use of parking meters is to ensure shared access to a limited parking resource. You can't just park your car all day there. You have to keep going back every hour to fill the meter, which means that you will usually leave and let someone else park there for a while.

The amount of the fine is irrelevant. It's just an annoyance to ensure that you realise the need to share the resource. If it does that, then the smaller the fine, the better.