Digital Transactions Authoritative, insightful and timely information for payments professionals
A survey of more than 170 senior-level executives for electronic payments processors, networks, and online merchants at a micropayments conference held earlier this month indicates a majority of the online merchants in attendance will be selling content with a micropayments system within a year. The survey, whose results were released this week, shows half are already, with another 30% saying they will. The respondents cited music as the most likely offering for micropayments, followed by games, publications, and video on demand. The conference was hosted in New York by Waltham, Mass.-based Peppercoin Inc., a startup specializing in so-called pay-as-you go micropayments processing for digital content and tangible merchandise, much of which could sell for $1 or less. The pay-as-you go model contrasts with other micropayments approaches favoring subscriptions and prepaid accounts, which are debited each time a user buys content. The Peppercoin system, invented by a pair of cryptographers, relies on charges to consumers' credit cards for payment, but avoids what otherwise could be ruinous discount fees for micropayments by aggregating transactions from multiple customers and presenting the batches for processing. Peppercoin performs the aggregation according to a proprietary method relying on probability (Digital Transactions News, Oct. 15). The survey result regarding the potential for music may have been prescient. Shortly after the conference ended, news surfaced that both Wal-Mart Stores Inc. and Microsoft Inc. intend to introduce online music services in competition with Apple Computer Inc.'s iTunes online music store, which sells songs online for 99 cents apiece.
