Digital Transactions Authoritative, insightful and timely information for payments professionals
The number of Americans ages 12 and up who bought sub-$2 digital content online in the past year has ballooned to more than 14 million, up from 4 million a year ago, according to a survey released today. “The data suggest that the online micropayments market has grown significantly in the past 12 months,” said Matt Kleinschmidt, a director at Ipsos-Insight, which conduced the survey for micropayments processor Peppercoin Inc., in a statement. The survey was released at a micropayments conference in New York sponsored by Peppercoin. Waltham, Mass.-based Peppercoin also announced the signing of a new customer for its micropayments and small-value processing system. Reino Parking Systems, a maker of card-accepting parking meters, said it will use Peppercoin to process credit and debit card transactions at its multispace meters for transactions running as low as under $1. Users will be able to swipe a card at the meter or pay by dialing a toll-free number on their cell phones and entering the meter number and payment amount. The arrangement includes acquiring services from SunTrust Merchant Services to Reino's clients, which are primarily municipalities. The Reino deal comes on the heels of Peppercoin's decision earlier this year to target small payments in the physical world as well as on the Internet. “The potential [for micropayments] is even greater in the physical world [than online],” said Robert Kiburz, president and chief executive of Peppercoin, in a statement. Some 17% of respondents in the survey released today?representing about 37 million people?said they would use a credit or debit card for transactions under $5 (the usual threshold for micopayments). Of these, some 6.5 million would use cards for sub-$1 transactions if it were possible. As for digital content, the survey results indicate that about 10% of respondents who bought items online for less than $2 did so from five or more Web sites, double the percentage shown in the October 2003 survey. The survey, which follows similar surveys conducted this spring as well as last year, included a telephone canvass of 1,112 randomly selected Americans 12 and older and has a margin of error of plus or minus 3%. Peppercoin this summer unveiled a new processing system, dubbed Peppercoin 2.0, to support both physical-world and e-commerce transactions as well as automated customer service (Digital Transactions News, June 28). It relies on proprietary technology based on probability theory to aggregate small-value payments into larger transactions to avoid the outsized bite interchange and other card transaction fees take out of payments under $5.
