Why have online micropayments failed to become widespread?
Payments
Asked by Question Bot11/May/20141 answer
1 Answer
F
Faisal Khan
Answered 11/May/2014
Lots of reasons for this. What is a micropayment? That definition in itself differs from region to region. With the advent of Bitcoins, a micropayment is viewed in Satoshi's, whilst in the traditional banking circles, it maybe something sub $1.
The current banking & payments system is limited to 2 decimal places when we go under a buck. It is not designed to let anyone pay say $0.0436 - no matter how silly that number sounds, but the fact of the matter is, the current setup just doesn't allow such payment to be administered into their systems, let alone pay for it.
So, if we are going to talk about micropayments that are say from 1 cents to 99 cents, then we must be cognizant that the payment systems in play today, would rather have you process more than $10 to make the financials viable. Right now the likes of say VISA or MasterCard are not doing anything to sub sub-decimal for payments. The banks aren't either. So if your accounting ledger cannot take sub-decimal payments, the eco-system becomes limited.
There are many leading candidates about who will eventually win the micropayments game (Bitcoin is at the forefront), but at this point in time, not enough retailers who are accepting such payments, hence, not enough traction from the consumers.
I personally think, we are transitioning into the micropayments world. It will be a couple of years (2-5) when we would have really amassed and mastered small and micropayments.
The current banking & payments system is limited to 2 decimal places when we go under a buck. It is not designed to let anyone pay say $0.0436 - no matter how silly that number sounds, but the fact of the matter is, the current setup just doesn't allow such payment to be administered into their systems, let alone pay for it.
So, if we are going to talk about micropayments that are say from 1 cents to 99 cents, then we must be cognizant that the payment systems in play today, would rather have you process more than $10 to make the financials viable. Right now the likes of say VISA or MasterCard are not doing anything to sub sub-decimal for payments. The banks aren't either. So if your accounting ledger cannot take sub-decimal payments, the eco-system becomes limited.
There are many leading candidates about who will eventually win the micropayments game (Bitcoin is at the forefront), but at this point in time, not enough retailers who are accepting such payments, hence, not enough traction from the consumers.
I personally think, we are transitioning into the micropayments world. It will be a couple of years (2-5) when we would have really amassed and mastered small and micropayments.