Digital Transactions Authoritative, insightful and timely information for payments professionals
The rising number of online content providers is provoking a steady stream of startups looking to facilitate payment of small fees for everything from ringtones to comics to newsletter items and songs. One of the latest is Palo Alto, Calif.-based Bitpass, which is in it the beta stage of attracting content sites and expects to rollout its micropayment service to all content providers within a month. Founded last December, Bitpass has attracted 200 Web merchants so far and, by pursuing a strategy of signing up Web hosting services, expects to have thousands using its prepaid payment service next year. Consumers use Bitpass by funding a Bitpass “card” through a credit card or PayPal account, then spend down the account at amounts as small as 10 cents or so by clicking on Bitpass icons displayed by participating online merchants. The typical prepayment is $75. Bitpass stands in as the merchant and pays all merchant discount fees, charging merchants 15% of transaction amounts for tickets under $5 and 5% plus 50 cents for amounts over $5. To scoop up thousands of sites at a time, the fledgling company plans to approach Web hosting services about offering the service to clients who sell content and have a need to accept micropayments. So far, merchant response has been positive. “We're gaining traction,” says Matthew C. Graves, a former Wells Fargo & Co. executive who came on board in January as chief operating officer. Next up, says Graves: micropayments over cell phones, using a Java applet installed in the phones.
