So what is a micropayment?

To be fair there is no industry standard on what a micropayment actually is, but it grew out of the Millicent Protocol for Inexpensive Electronic Commerce from 1995 where the concept was basically any transaction between 1/10th of a cent up to $5.00.

During the late 1990s there was a movement to create microtransaction standards, and the W3C also worked on incorporating micropayments in to HTML. There was even discussions going so far as to suggest the embedding of payment-request information in HTTPS error codes, however, they have since stopped efforts in this area.

As there has not been one large player defining the standard for micropayments, the industry has developed a number of forks.

Some good examples of micropayments systems around the world include:

  • Swish in Sweden, which can move between 1 SEK (around 11 Euro cents) at its lowest transfer and 10,000 SEK (around 1100 Euros) although 150,000 SEK can be transferred if the transaction is pre-registered in the internet bank.
  • WeChat Pay and its Red Packet system that allows users within WeChat to send each other a virtual red packet – either as a one to one payment for a set amount or a total amount to be distributed amongst a set number of people randomly. Amounts can be between 1RMB and 200RMB (about AUD 30).
  • Change Up and its capacity to allow consumers to accumulate their physical change from a transaction and store that for future redemption (at a 1:1 ratio for cash) on products and services with a merchant.

Of course all of these micropayments systems use a digital wallet to hold on to funds.

Thinking about creating your own micropayments strategy and solution? Whatever your needs are, we can help you decipher the right solution to suit.

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