Micropayments: Big Money in Small Change

Gartner is predicting that online micropayments -- transactions ranging from $1 to $5 -- will become a driving force in e-commerce over the next decade. In fact, Gartner predicts that micropaypents will become a $60 billion market by 2015.

Lower transaction costs, combined with a demand for a la carte purchases of inexpensive digital items like music and ringtones, are driving the micropayment market. Also driving the trend are young people, who want to buy relatively inexpensive items online. Many types of subscription services could be sold "by the slice" via micropayments, making them more appealing to those who want to make occasional purchases with the committment or expense of a long-term subscription.

Micropayments are not new to e-commerce. What has been missing in the past is an infrastructure that would allow users to place money into accounts if they coundn't or didn't want to use traditional credit cards. Once such an account system is established with the universal acceptance and trustworthiness of, say, Visa or Mastercard, micropayments could truly take off.

Source: Forbes