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 while 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 the emergence of micropayment systems 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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History [edit]
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.
Early research and systems [edit]
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.
IBM Micro Payments [edit]
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]
iPIN [edit]
An early attempt at making micropayments work, iPIN was a 1998 venture-capital-funded startup that provided services that 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]
Millicent [edit]
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 the project became associated with Compaq after that company purchased Digital Equipment Corporation.[10] The payment system utilized symmetric cryptography.[13]
NetBill [edit]
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]
Online gaming [edit]
The term microtransaction is sometimes used to refer to the sale of virtual goods in online games, sometimes with a game-specific currency bought with real-world money and then used in that game.
Recent micropayment systems [edit]
Current systems either allow many micropayments but charge your phone bill one lump sum or use funded wallets.
Flattr [edit]
Flattr is a micropayment system (more specifically, a microdonation system) which launched in August, 2010.[17] Actual bank transactions and overhead costs are involved only on funds withdrawn from the recipient's accounts.
M-Coin [edit]
A service provided by TIMWE, M-Coin allows users to make micropayments on the Internet. The user's phone bill is then charged by the mobile network operator.[18]
Payclick [edit]
A short-lived micropayment system set up by Visa Inc in Australia, Payclick relied on a funded wallet that was drawn from when purchases at participating online retailers were made.[2] This service was discontinued on 12 February 2013.[19]
Znak it! [edit]
An online content monetization platform that uses pre-paid virtual tokens that allow access to content, such as articles, videos, games, etc.[20] It may be popular in Poland.
Zong [edit]
Zong mobile payments is a micropayment system that charges payments to users' mobile phone bills.[21] This service can be used to purchase virtual goods in online games and social networks.[22]
PayPal [edit]
PayPal MicroPayments is a micropayment system that charges payments to user's PayPal account and allows transactions of less than US$12 to take place.[23] The service is, as of 2013, offered in select currencies only.[24]
References [edit]
- ^ Micropayments paypal.com
- ^ a b Visa launches new way to pay online payclick.com.au, 24 June 2010 (archive.org cache)
- ^ 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. 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 8th 1999 Internet Engineering Task Force – ietf.org
- ^ The NetBill Project (Archive) archive.org
- ^ About NetBill (Archive) archive.org
- ^ Archives of Netbill sites archive.org
- ^ Steve O'Hear (August 12, 2010). "Flattr opens to the public, now anybody can ‘Like’ a site with real money". TechCrunch Europe. Retrieved August 13, 2010.
- ^ "MCoin Product Lines - Mobile Marketing magazine". Mobile Marketing Magazine. 2011-06-30. Retrieved 2011-07-02.
- ^ "Cancellation of service". payclick by Visa. Visa. 2012. Retrieved January 05, 2013.
- ^ "Think Micropayments for Media Can't work? - PaidContent". PaidContent - GigaOm. 2013-05-06. Retrieved 2013-05-09.
- ^ 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.
- For use in games and social networks, see Where to find Zong Zong Official Site
- ^ Rao, Leena (October 26th, 2010). "PayPal Unveils Micropayments For Digital Goods, Facebook Signs Up". techcrunch.com. AOL. Retrieved November 23, 2012.
- ^ "Micropayments". PayPal Integration Center. PayPal. Retrieved November 23, 2012.
