Micropayments are a payment system designed for small amounts of a few cents or perhaps a few dollars. Such systems are designed for quick authorization and authentication such that payments are effortless to make. Micropayments have potential to spark new business models and transform industries. The following are illustrative examples of a micropayment.
MediaThe ability to pay a few cents to read a newspaper article without ads or watch a television show without commercials.
ArtThe ability to pay small amounts to artists. For example, a art community with a button that allows for an instant payment to support an artist you like.
MessagingMicropayments have been proposed as a means of preventing spam messages. For example, if it cost $0.01 to send a message, this would get expensive fast if you're sending millions of messages.
Virtual ItemsSmall payments for virtual items in games, apps and social media.
SoftwareA pay-as-you-go model for software services with no upfront or recurring fees.
DonationsThe ability to make small donations to charity. This might lead to a model whereby people donate on a daily basis to things they want to support as opposed to making a few donations a year. Such micropayments could be automatically aggregated to produce manageable tax receipts.
|Definition||Payments systems designed to make extremely small payments practical.|
|Notes||The fee structure of micropayment systems also needs to be micro such that fees are a small percentage of each payment despite their small size.|
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