Analysis
Research "What Makes a Micropayment Solution Succeed" Institution for Applied Information Technology By Henrik Kniberg
— Micro-payment solutions likelihood of success increases significantly if it builds upon an existing billing relationship between a company and its users.
— Trust is more important than security, and that many payment solutions have failed because they focused too much on security. Users and merchants are more likely to use an insecure payment system from a trusted company than a secure payment system from an untrusted company.
— Once a payment solution has credibility in the eyes of the users, we believe the secondary factors determining the success or failure are the ones listed:
- Pervasiveness
- Ease of joining
- Ease of use
- Fixed transaction cost
- Transaction speed
— Micropayments as low as $0.1 or less are still uncommon. This is possibly explained by the fact that none of the major payment solutions today make it convenient or economical to handle such small payments. Offering a solution where people can pay as much as they can will boost a sale of any organization.
— Final conclusion is that it is extremely difficult for new payment systems to achieve widespread acceptance, and that any company that wishes to enter this area must have plenty of capital, be willing to wait years before return on investment, establish partnerships with major trusted companies that have existing payment relationships with millions of users (for example banks and telecom operators), implement a technical solution that is fast and easy to use for all parties, and make sure that both merchants and buyers actually benefit from the new payment system
