Micro Payments ON THE Internet

 

With high speed domestic access to the internet due to become widely available this summer, and internet access via  mobile phones spreading, many more people will want to pay on-line for - information such as the directions to a holiday destination, and entertainment items such as music. Pure information, such as news, is likely to remain free of charge, paid for by the advertising broadcast with it. But some services will have to be paid for, and cheap.

 

Currently, it is difficult to collect small amounts - less than Credit Card or Debit Card providers are willing to process, eg 25p. It is also difficult to achieve the anonymity of a "cash" transaction.

 

There are a number of possibilities.   Electronic money such as Beenz units, which can not be purchased - only acquired by surfing relevant www sites. [http://www.beenz.com]    Payments for services/goods can be added on to a telephone bill. Global Internet Billing  provide one such service.  [http://www.glintbill.com] People may be willing to pay an up-front fee to a site and then get a number of instances of the service from the site, eg £5 by credit card for 10 tracks from a record company's music collection.  An example is the WorldAccount service. [http://www.worldpay.com]  Smart Cards are though to offer the best prospects for the anonymous transfer of small sums between two computers. [http://www.mondex.co.uk  http://www.mastercard.com   http://www.visa.com http://www.protonworld.com   http://www.smartaxis.co.uk]  

 

Vendors/Providers will not want to "equip" their sites with a whole host of different methods of taking payment - so some standardisation will have to occur, and it will probably have to be international. To get widespread acceptance, any system will have to work for internet users not connecting using a PC, eg cable tv subscribers.

 

In my opinion, this chicken and egg problem will not be resolved until the "banks" put their weight behind a scheme.

 

Two other factors that may be limiting take up of online micro payments are : The percentage that is creamed off each transaction by the transaction processing services. The difficulty in finding 'content' that consumers are prepared to pay for.

 

 

Update at 20 November 2003

 

Global Internet Billing and chargit.com have ceased trading.

Mondex has been transformed in to a small part of Mastercard Online in the USA.

Smartaxis has been subsumed in to the 'chyp retail alliance'.

 

PayPal, www.paypal.com, has become an established player in this market, and has become a favourite for phishers sending e-mail worms seeking to elicit account details by trickery. Paystone, www.paystone.com is a similar service.

 

www.metacharge.com covers a number of the possibilities.

 

The mobile phone operators, eg Vodafone, are interested in the topic. A telephone number based service is offered by www.glpayment.co.uk

 

Worldpay, part of the Royal Bank of Scotland, was the subject of a sustained denial of service attack, and survived unscathed.

 

NTL and Telewest have over a million broadband customers between them, and the ADSL broadband user base is increasing rapidly. There are hopes that 'all' UK homes will be able to access broadband by the end of 2005.

 

Update at  -  24 August 2001

 

www.beenz.com is going out of business with the following message -

Pursuant to the Terms and Conditions - Membership Agreement of beenz.com, the operation of the beenz economy will be terminated at 12:01 am (Eastern Standard Time - EST) on August 26, 2001. No beenz earning or spending transactions will be honored after that date and time. Any beenz remaining in a Member's account after 12:01 am (EST) on August 26, 2001 will be invalidated by beenz.com, and the Member will not be entitled to any compensation of

any kind for such invalidated beenz.