Micropayments Open Up New Sources Of Online Revenue
By Gary Corbett
Demand for micropayments is increasing fast as social networking and dating sites wake up to the benefits of taking small subscriptions via secure SMS or voice billing services. Adding to this and as part of the Digital Britain report, the Government's body for business innovation in technology, the Technology Strategy Board, has announced a £10M investment to work, at least in part, with industry partners to create and trial new models, including micropayments for online content and video on demand.
But with the organisations receiving only 66 pence in every £1 for micropayments due to network charges,...
...compared with 96 pence for credit card transactions, there is a very real danger that the market for micropayments for a range of online goods and services could be severely constrained.
Given the lack of credit card penetration in many countries, including China, and within the younger demographic that still dominates the online customer base, the need for robust and commercially viable micropayments is pressing.
With the arrival of proven technology that can be delivered globally and rapidly integrated into core systems, online vendors now have seamless access to a whole new revenue stream - but just how many organisations will be deterred by the excessive network charges, asks Gary Corbett, Commercial Director, Oxygen8 Communications.
Whilst providers of online goods and services continue to buck the economic downturn, it is clear that a significant proportion of potential online revenue is being lost due to the near reliance on credit cards for payment. Whilst a number of micropayment solutions have been introduced in recent years, a lack of global integration and the complexity of attempting to manage different mechanisms across different countries and networks have deterred the vast majority of organisations from supporting any payment option other than credit... continued on page two >