Micropayment Roundup

By Deane Barker on December 2, 2003

Tiny Internet sales hyped again, but skeptics abound: Another article on micropayments, which have jumped back into the mainstream again in the last few months. The article profiles BitPass, of course, but also PepperCoin (“a big change for small change”) and PaymentOne — two new outfits I hadn’t heard of before.

Here’s the advantage for content providers: If you wanted to sell a poem for 20 cents, you wouldn’t accept Visa or MasterCard, because the fees involved would drain most, if not all, of your 20 cents. Similarly, PayPal takes 2.9% of a sale plus 30 cents, so selling your 20-cent poem would be a dream deferred.

But with a micropayment carrier, you could expect to give up 15%. Your 20-cent poem would bring in a healthy 17 cents. And micropayment providers can make life easier by paying you $17 for every 100 poems, instead of 17 cents after each sale.

The trick for micropayment companies is to convince Web surfers that there’s so much good online content available for nickels and dimes that it’s worthwhile to bother stocking a prepaid account with a few bucks.