Micropayment
A micropayment is a financial transaction involving a very small sum of money and usually one that occurs online. PayPal defines a micropayment as a transaction of less than 12 USD[1] while Visa prefers transactions under 20 Australian dollars,[2] and though micropayments were originally envisioned to involve much smaller sums of money, practical systems to allow transactions of less than 1 USD have seen little success.[3]
One problem that has prevented their emergence is a need to keep costs for individual transactions low,[4] which is impractical when transacting such small sums[5] even if the transaction fee is just a few cents.
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[edit] History
Micropayments were initially devised as a way of allowing the sale of online content and were envisioned to involve small sums of only a few cents.[5] These transactions would enable people to sell content on the Internet[5] and would be an alternative to advertising revenue.[6]
During the late 1990s, there was a movement to create microtransaction standards,[5] and the World Wide Web Consortium (W3C) worked on incorporating micropayments into HTML even going as far as to suggest the embedding of payment-request information in HTTP error codes.[4] The W3C has since stopped its efforts in this area,[4] and micropayments have not become a widely used method of selling content over the internet.
[edit] Early research and systems
In the late 1990s, established companies like IBM and Compaq had microtransaction divisions,[5] and research on micropayments and micropayment standards was performed at Carnegie Mellon and by the World Wide Web Consortium.
[edit] IBM Micro Payments
IBM's Micro Payments was established c. 1999,[7] and were it to have become operational would have "allowed vendors and merchants to sell content, information, and services over the Internet for amounts as low as one cent".[8]
[edit] iPIN
An early attempt at making micropayments work, iPIN was a 1998 venture capital funded startup that provided services which allowed purchasers to add incremental micropayment charges to their existing bill for internet services.[9] Debuting in 1999, its service was never widely adopted.[9]
[edit] Millicent
Millicent, originally a project of Digital Equipment Corporation,[10] was a micropayment system that was to support transactions from as small as 1/10 of a cent up to $5.00.[11] It grew out of The Millicent Protocol for Inexpensive Electronic Commerce, which was presented at the 1995 World Wide Web Conference in Boston,[12] but became associated with Compaq after that company purchased Digital Equipment Corporation.[10] The payment system utilized symmetric cryptography.[13]
[edit] NetBill
The NetBill electronic commerce project at Carnegie Mellon university researched distributed transaction processing systems and developed protocols and software to support payment for goods and services over the Internet.[14] It featured pre-paid accounts from which micropayment charges could be drawn.[15] Initiated in 1997, NetBill seems to have died completely sometime after 2005.[16]
[edit] Online gaming
The term microtransaction is sometimes used to refer to the sale of virtual goods in online games like World of Warcraft.
[edit] Current micropayment systems
Current systems either allow many micropayments but charge your phone bill one lump sum or use funded wallets.
[edit] The Exception Magazine
The Exception Magazine, an online newspaper based in Maine, launched a micropayment system in July, 2010, which uses a cell phone for payment.[17]
[edit] Flattr
Flattr is a micropayment system (more specifically, a microdonation system) which launched in August, 2010.[18] Actual bank transactions and overhead costs are involved only on funds withdrawn from the recipient's accounts.
[edit] M-Coin
A service provided by TIMWE, M-Coin allows users to make micropayments on the Internet. The users' phone bill is then charged by the mobile network operator.[19]
[edit] Payclick
A micropayment system set up by Visa Inc in Australia, Payclick allows users to fund an account that is then drawn from when purchases at participating online retailers are made.[2]
[edit] Znak it!
A digital content monetization and micropayment platform using pre-paid virtual tokens – Znaks – to charge and pay for premium content and virtual goods. Znak it! was developed by Znak Inc.[20] and first presented at the 2008 Web2.0 Expo in San Francisco. In April 2011, Znak it! was awarded the Florin Transaction Service Award for innovation[21]
[edit] Zong
Zong mobile payments is a micropayment system that charges payments to users' mobile phone bills.[22] This service can be used to purchase virtual goods in online games and social networks.[23]
[edit] References
- ^ Micropayments paypal.com
- ^ a b Visa launches new way to pay online payclick.com.au, 24 June 2010
- ^ In Online World, Pocket Change Is Not Easily Spent nytimes.com, August 27, 2007
- ^ a b c Micropayments Overview w3c.com
- ^ a b c d e Toward a Click-and-Pay Standard wired.com, 11.03.99
- ^ Common Markup for micropayment per-fee-links 1.1 Origin and Goals W3C Working Draft 25 August 1999
- ^ Archives of IBM Micro Payment sites archive.org
- ^ IBM Micro Payments (Archive) archive.org
- ^ a b Johnson, Amy Hellen. "iPIN". ComputerWorld.com. ComputerWorld. http://www.computerworld.com/s/article/44837/iPIN. Retrieved 4 January 2012.
- ^ a b Compaq to license digital cash technology cnet.com, December 23, 1998 6:10 PM PS
- ^ Millicent (Archive) archive.org
- ^ Millicent What's New -- June 1997 (Archive) archive.org
- ^ 2.6.10 Micro Payments (micropay) bof Current Meeting Report, November 8'th 1999 Internet Engineering Task Force - ietf.org
- ^ The NetBill Project (Archive) archive.org
- ^ About NetBill (Archive) archive.org
- ^ Archives of Netbill sites archive.org
- ^ "Exception Magazine Launches News Industry's First Mobile Micropayment System | The Exception Magazine". Exceptionmag.com. 2010-07-15. http://exceptionmag.com/business/media/0001805/exception-magazine-launches-news-industrys-first-mobile-micropayment-system. Retrieved 2010-09-04.
- ^ Steve O'Hear (August 12, 2010). "Flattr opens to the public, now anybody can ‘Like’ a site with real money". TechCrunch Europe. http://eu.techcrunch.com/2010/08/12/flattr-opens-to-the-public-now-anybody-can-like-a-site-with-real-money/. Retrieved August 13, 2010.
- ^ "MCoin Product Lines - Mobile Marketing magazine". Mobile Marketing Magazine. 2011-06-30. http://mobilemarketingmagazine.com/content/timwe-launches-m-coin-brand-0. Retrieved 2011-07-02.
- ^ "Znak it! Premium Content Monetization and Payment Platform; Website". http://www.znakit.com.
- ^ "Florin 2011 awards winners announced!". The Paypers. 2011=15-05. http://www.thepaypers.com/blog/.
- ^ Fear not! Let’s get you on the right path, my friend: Consumers Zong Official Site
- ^ For purchase of virtual goods, see "Zong Lets You Bill Web Apps To Your Phone". TechCrunch. 8 September 2008. http://www.techcrunch.com/2008/09/08/zong-lets-you-bill-web-apps-to-your-phone/.
- For use in games and social networks, see Where to find Zong Zong Official Site
