How Micropayments Can Drive The Future of Economy

One important aspect of micropayments is the 소액결제 현금화 fact that its definition varies from person to person. Generally, micropayments are regarded as financial transactions involving very small sums of money. Globally, micropayments refer to transactions of less than 12 USD. According to techtarget.com, a micropayment is an e-commerce transaction involving a very small sum of money in exchange for something made available online, such as an application download, a service or Web-based content.

Micropayments are too small to be feasible for processing through the traditional credit card/debit card system. Amir Herzberg of IBM recounts “Micropayments are for anything that is too inexpensive to pay by credit card”.

The major challenge facing the feasible application of micropayments is the need to keep costs for processing individual transactions low which is impractical when transacting very small sums of money typical of the nature of the micropayment system. Several attempts have been made to make such systems financially feasible to the providers such as the bill to phone model that companies like Zong and Boku have employed. The bill to phone ensures that consumers are able to charge low value transactions to their mobile phone and are sent a transaction code by SMS to complete the transaction. However, the sharing formula that exists between the providers of the micropayment platform and the Mobile Network Operators (MNOs) is largely not in favour of the providers, this has been the key reason for the slow adoption globally.

Largely, micropayments have been used for online transactions in the social community space on websites like Facebook where users can purchase virtual items in games like mobwars, premier football and Farmville to name a few. It’s foray into the print media for pay per view content has been very discouraging as users would simply navigate to another website where they can get the content for free.

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