5.E-Micropayment
E-Micropayments:
Small online payments, typically under$10
●Debit and credit cards do not work very well for such a small payment
●Credit and debit cards typically must pay a minimum transaction fee that ranges from $0.25to$0.35 plus 2to3 percent of the purchases priceàThese fees are relatively insignificant for card purchases over $5,but can be costly for smaller transaction
●E-micropayment have come to represent a growth opportunity for credit card companies .
Examples for E-Micropayments in real life:
1- A customer goes to an online music store and purchases a single song that costs$0.99
2-A person goes to an online gaming company ,selects a game ,and play it for 30minutes .
3-A person goes to a Web site selling digital images and clip art .The person purchases a couple of images at a cost of $0.80.
●Debit and credit cards do not work very well for such a small payment
●Credit and debit cards typically must pay a minimum transaction fee that ranges from $0.25to$0.35 plus 2to3 percent of the purchases priceàThese fees are relatively insignificant for card purchases over $5,but can be costly for smaller transaction
●E-micropayment have come to represent a growth opportunity for credit card companies .
Examples for E-Micropayments in real life:
1- A customer goes to an online music store and purchases a single song that costs$0.99
2-A person goes to an online gaming company ,selects a game ,and play it for 30minutes .
3-A person goes to a Web site selling digital images and clip art .The person purchases a couple of images at a cost of $0.80.
Q: who is the major user of E-Micropayments??
Substantial percentage of micropayment purchases are made by individuals younger than 18-àmany of whom do not have credit or debit cards
Substantial percentage of micropayment purchases are made by individuals younger than 18-àmany of whom do not have credit or debit cards
●in online world consumer are interested in making small-value purchases
● the rate of E-micropayments have been increasing over the years
Basic E-Micropayment Models :
●That do not depend solely or directly on credit or debit cards
●Some of these are better suited for offline payment than online payment
●Models are:
1-Aggregation àpayment from a single consumer are batched together and proceeds only after a certain time period has expired (20 business days)or a certain monetary threshold àthis model is used by Apple’s iTunes
( This model is well suited for vendors with a lot of repeated business)
2-Direct paymentàMicropayments are added to a monthly bill for existing services
-Example:
Phone bill
( this model used by cellular companies for ringtone downloads )
Real life e-micropayments
PayOne
http://www.payone.com/
● the rate of E-micropayments have been increasing over the years
Basic E-Micropayment Models :
●That do not depend solely or directly on credit or debit cards
●Some of these are better suited for offline payment than online payment
●Models are:
1-Aggregation àpayment from a single consumer are batched together and proceeds only after a certain time period has expired (20 business days)or a certain monetary threshold àthis model is used by Apple’s iTunes
( This model is well suited for vendors with a lot of repeated business)
2-Direct paymentàMicropayments are added to a monthly bill for existing services
-Example:
Phone bill
( this model used by cellular companies for ringtone downloads )
Real life e-micropayments
PayOne
http://www.payone.com/
What is PayOne??
a worldwide leader in mobile payments and carrier billing, PayOne invented the “no credit card required” business model more than a decade ago. PayOne’s platform and payment technology are deployed by merchants and publishers globally to eliminate friction, increase checkout conversion and streamline the purchase process.
●PayOne has a robust patent portfolio covering mobile commerce, fraud prevention, authentication, and alternative payments
●The company’s record of delivering the highest monetization rates and it’s A+ rating from the Better Business Bureau have earned the company the lowest client churn rate in the business
https://www.youtube.com/watch?v=LH3Qmi6THVQ
1-Stored value à up-front payments are made to a debit account and then purchases are deducted as they are made.
(offline vendors often use this model )
-example:
Starbucks café
2-Subscriptionàasingle payment covers accsess to cntent for a defined period of time
(online vendors use this model)
example:
Wall Street jurnal
Wall street journal Youtube channel
http://www.youtube.com/user/WSJDigitalNetwork/videos?view=0
3-A la carteàvendors process purchases as they occur and rely on the volume of purchases to negotiate lower credit and debit card processing fees
(use this model offline)
Example :McDonald’s
(use this model offline)
Example :McDonald’s
●In August 2005 PayPal entered the micropayment market