Digital content fuels surge in micropayments
05 October 2004 | 5027 views | 0
More than 14 million US consumers have purchased digital content costing less than $2 in the past year, an increase of over 10 million since October 2003, according to research by micropayments firm Peppercoin and market research company Ipsos-Insight.
According to a survey of 1,112 Americans aged 12 and over, consumers are increasingly comfortable purchasing small-value items from Web sites. Approximately 10% of those purchasing items for less than $2 online in the past year did so from five or more Web sites - twice as many as a year ago October 2003.
Robert Kiburz, president and CEO of Peppercoin, says: "Digital music and other electronic offerings have validated the business case and the need for an online small payments solution over the past year."
The survey also found that 17% of respondents - which represents approximately 37 million Americans - would use a credit, debit or charge card for a transaction of less than $5. Additionally, an estimated 6.5 million would use their cards for transactions of less than $1 if they could.
More consumers are ready to use their credit, debit and charge cards to pay for a variety of low-priced items such as gas, fast food, coffee, vending machines and video games. The most requested option was for gas, with 73% of respondents indicating interest.
Kiburz says: "By investing in technology that can reduce the costs of processing small value payments, merchants and the payments industry can increase the number of card-based transactions and drive more sales."
Matt Kleinschmit, director, Ipsos-Insight, adds: "There appears to be some specific payments opportunities in the physical world that are ripe for a card-based small payments system."