Micropayment: Wikis


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From Wikipedia, the free encyclopedia

Micropayments are financial transactions involving very small sums of money. PayPal defines a micropayment as a transaction of less than 12 USD,[1] and offers reduced fees for micropayment transactions. A problem that has prevented the emergence of feasible micropayment systems that allow payments of less than 1 USD is a need to keep costs for individual transactions low,[2] which is impractical when transacting such small sums,[3] even if the transaction fee is just a few cents.



Micropayments were initially devised as a way of allowing the sale of online content and were envisioned to involve small sums of only a few cents.[3] These transactions would enable people to sell content on the Internet for small sums[3] and would be an alternative to advertising revenue.[4] During the late 1990s there was a movement to create microtransaction standards,[3] and the World Wide Web Consortium (W3C) worked on incorporating micropayments into HTML, even going as far as to suggest the embedding of payment-request information in HTTP error codes.[2] The W3C has since stopped its efforts in this area,[2] and micropayments have not become a widely used method of selling content over the internet.

Early research and systems

In the late 1990s, established companies like IBM and Compaq had microtransaction divisions,[3] and research on micropayments and micropayment standards was performed at Carnegie Mellon and by the World Wide Web Consortium.

Compaq's[3][5] Millicent was a micropayment system that supported transactions from as small as 1/10th of a cent up to $5.00.[6] It grew out of The Millicent Protocol for Inexpensive Electronic Commerce, which was presented at the 1995 World Wide Web Conference in Boston.[7] Millicent utilized symmetric cryptography.[8]

The NetBill electronic commerce project at Carnegie Mellon university researched distributed transaction processing systems and developed protocols and software to support payment for goods and services over the Internet.[9] It utilized a pre-paid account that micropayment charges would be drawn from.[10] Started in 1997,[11] it was an early foray into microtransaction research.

IBM's Micro Payments was established circa 1999[12] and would have "allowed vendors and merchants to sell content, information, and services over the Internet for amounts as low as one cent."[13]

Online gaming

The term microtransaction is sometimes used to refer to the sale of virtual goods in online games, like World of Warcraft.

See also


External links


The micropayment debate

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