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Readers’ Comments on Micropayments

Attempts to perform transaction aggregation at one or across multiple merchants incur an additional hurdle when the payer is a teen equipped with a prepaid debit card. As these cards usually carry a small balance, the merchant or third-party payment provider runs a high risk of seeing the transaction being declined when the aggregated amount is presented to the payment network. This holds true even if an authorization request was performed prior to the user starting to make purchases, as in the mean time the balance on the debit card may have decreased to become lower than the value of the aggregated amount submitted to the network. Finally, no micropayment system will succeed on a wide scale without trusted systems. Although advertising and merchandising applications like Compaq’s pilot could thrive on 소액결제 정책미납 technology without copyright safeguards, most digital intellectual property will remain valueless until it is scarce.

The examples illustrated here do offer some lessons for how and when micropayment technology could flourish. First, like most Web technology, micropayments rely heavily on network effects and thus must wait until e-cash or some other form of digital money becomes widely used. In this sense Kelly and Goldhaber are right in that companies should concentrate on providing free services to grow networks. But their theories fail to see that once people begin to rely on networks different payment schemes can be imposed.

Electronic value is held by the user, not a bank, and purchases can be made without any financial intermediary. Purchases can also be made in tiny increments, which makes it an ideal vehicle for micropayments. If Microsoft can successfully link its smart card business to its increasingly popular Windows suite of programs, then micropayments may be able to reach a critical enough mass for network effects to begin. Once smart cards are established as a common mode of payment, micropayment technology will succeed or fail based on business strategy rather than barriers to entry. Of a special interest to the present invention are merchants who sell items of small monetary value, for which the fees MF charged by ordinary acquirers of card transactions represent a prohibitively high percentage of the items price. 2 shows the typical structure of a fee 200 charged to merchants for card payment processing, where the merchant fee MF is comprised of a fixed amount 210 to which a percentage amount 220 of the purchase amount is added.

Interoperability between micropayment systems is rarely provided let alone addressed. Interoperability is impossible because token-based systems create new currencies – eCoins, scrips, merchant-specific tokens, etc. Funds represented in one system can hardly be converted into funds of another systems.

The Compaq system presents both the best and worst case scenario’s for the future character of a Web dominated by micropayment technology. On the one hand browsers receive tangible rewards for their surfing in ways the regular economy can only simulate. On the other hand basic conveniences like ignoring ads or accessing interesting content are commoditized in ways consumers generally don’t contemplate. Although Cable and PBS each charge consumers for the privilege of ignoring ads it is done so on an indirect and monthly basis that consumers seem to find less offensive. Of course anyone who has spent a minimum amount of time surfing the Web knows that advertising is the dominant revenue model for commercial sites. Nearly $1 billion will be spent on online ads in 1998, ranging from cars to cold medicine to porn.

Contemporary micropayment schemes have compromised the security by giving full anonymity only to merchants, while the user has only partial anonymity . The deprivation of anonymity eases the traceability of transactions. The possibility to trace one’s own transactions can, however, also be seen as an advantage for the customers, since they are interested in a service that allows them to check what they bought using their account. However, even a single micropayment transaction, such as request of adult content, can be uncovered and cause the user inconveniencies. Though totally anonymous micropayment systems would be ideal from the viewpoints of many users, the contemporary payment systems offer only partial anonymity . This may not be a problem in every system, since the users seem to accept the degradation of the security level to be able to purchase goods easily.

The Hindu is also in talks with several platforms and plans to provide this option to their readers in the coming two months. Greater emphasis on revenue return is unlikely to eliminate the appeal of personal pages or purely informational sites, just as the present marketplace retains room for nonprofit advocacy groups, public service organizations, and community theaters. But businesses that drive the expanding scale of the Web and hence the appeal of being on it for personal or informational purposes, will have to find efficient ways of making money for the benefits of the Internet’s unique freedoms to reach a majority audience. Users will pay Coil a fixed monthly fee and install its browser extension which acts as a browser-based digital wallet. This browser extension then looks for a meta tag in the website header that complies with theWeb Monetization draft W3 standard. When it finds it on a web page, it uses theInterledger protocolto stream money in analogy to the way that Netflix streams video.

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