Small Change
Are Micropayments Worth Trying? A Look At Digital's MilliCent System.
By Russ Jones
Many sites on the Internet would like to sell online content and services, as well as reward users for reading certain content or taking certain actions. In many cases, these sites could benefit from the ability to handle small change instead of the larger dollar amounts typical of most online orders today. This ability to easily exchange small amounts between servers and clients is called microcommerce. Microcommerce is a new two-way transaction technology that shows much promise, but is still experimental. This article will help you understand how microcommerce systems work, and how to set up and test such a system on your Web site using the MilliCent system.
Microtransactions on the Web
Why introduce yet another type of financial transaction when credit and debit cards are so ingrained into everyday life? While credit cards are quite suitable for purchasing large-ticket items, the "per transaction" fees that vendors must pay make them unprofitable for selling goods under $10. Off-Net authorization delays and a general loss of anonymity further compound the problem. Moreover, because credit cards are so closely tied to real money, they're not suitable for promotional incentives, rebates, and coupons that are Web-site specific.
With these shortcomings in mind, microcommerce solutions are cost-effective systems that use electronic money, or e-money, to represent units of value. These systems can scale downward to support transactions as small as a quarter, a dime, or even a fraction of a penny.
