Micropayments And Digital Cash

(e-Wallet)

What is Micropayments and How does It Work

Micropayments are used to process small transaction amounts (from a few cents to $10 USD) that would otherwise severely limit profit or even cost more than the actual product cost if processed the same as credit cards.

The processing of micropayments is a lot like the processing of credit cards. With the exception that the transaction costs for micropayments is substanstially less. Some micropayment companies add the charges to your Internet Service Provider (ISP) bill.

Micropayments acceptance has been around several years, but is still in its infancy. It’ll be several years before micropayments will become a more widely used payment acceptance method. Right now many Internet users just aren’t ready to spend a few cents or dollars to view content, download music, etc. Experts believe by 2005 micropayments will show up more on e-commerce enabled websites.

Who Needs This Solution?

This solution is good for Internet merchants who sell information (or other intangible goods) that cost between a few cents to a few dollars each. Some examples of goods that would be excellent for a micropayments solution:

  • Music
  • Pay-per-play games
  • Newspapers, articles, reports, etc.
  • Small computer programs
  • Tickets and postcards

(e-Cash, e-Money)

What is Digital Cash and How does it Work

Digital Cash is basically an encrypted serial number (online e-currency) that simply represents money and is placed into an account. The customer then can spend the money at different merchants that support the digital cash provider the customer signed up with. A customer can add more money to their digital cash account by using their credit card or even their checking account.

Digital Cash gives added security and peace of mind to customers as they are not actually using their credit card directly to make purchases. This eliminates most all threats of fraud.

One downside of digital cash is the fact that only a small number of online merchants may accept digital cash payments. It’s not nearly as widely used as regular credit card acceptance is, however, the future looks bright for digital cash acceptance to expand.

Who Needs This Solution?

Offering a payment acceptance solution that eliminates the threat of fraud, like digital cash does, would cater to customers who are uneasy about giving credit card information via the Internet.

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