How 소액결제현금화 Can Drive the Future

One important aspect of 소액결제현금화 is the fact that its definition varies from person to person. Generally, micropayments are regarded as financial transactions involving very small sums of money. Globally, micropayments refer to transactions of less than 12 USD. According to techtarget.com, a micropayment is an e-commerce transaction involving a very small sum of money in exchange for something made available online, such as an application download, a service or Web-based content.

Micropayments are too small to be feasible for processing through the traditional credit card/debit card system. Amir Herzberg of IBM recounts “Micropayments are for anything that is too inexpensive to pay by credit card”.

The major challenge facing the feasible application of micropayments is the need to keep costs for processing individual transactions low which is impractical when transacting very small sums of money typical of the nature of the micropayment system. Several attempts have been made to make such systems financially feasible to the providers such as the bill to phone model that companies like Zong and Boku have employed. The bill to phone ensures that consumers are able to charge low value transactions to their mobile phone and are sent a transaction code by SMS to complete the transaction. However, the sharing formula that exists between the providers of the micropayment platform and the Mobile Network Operators (MNOs) is largely not in favour of the providers, this has been the key reason for the slow adoption globally.

Largely, micropayments have been use for online transactions in the social community space on websites like Facebook. Where users can purchase virtual items in games like mobwars, premier football and Farmville to name a few. It’s foray into the print media for pay per view content has been very discouraging as users would simply navigate to another website where they can get the content for free.

Micropayments has had its share of attempts at standardization notable among these attempts is the micropayments per fee specification of the W3C (World Wide Web Consortium) which includes a Common Markup for Micropayment Pay-Per-Fee Links as well as a description of a wallet handler that serves all requests for the per-fee service. However since vendors implement disparate proprietary micropayment infrastructure this has prevented the adoption of W3C’s specification.

As an emerging area, it has undergone some metamorphosis which was clearly describe by Robert Parhonyi of the University of Twente in the Netherlands in his paper “Second Generation micropayment systems: Lessons Learned”. He predicted that the market for low value products such as online music. And videos and the role of micropayment systems for selling such products are expect to grow substantially. He classified micropayments into 2 generations in which the first generation appeared around 1994, with systems like Millicent. Ecash and cybercoin which were unable to gain market share and disappeared slowly in the late 1990s. The 2nd generation appeared around 1999-2000 and are still operational.

He believes most of the failure causes have been account for in the second generation. And have a much better chance to be successful largely. Because of the way the Micropayment System Operators (MPSO’s) have implemented the technical. And non-technical characteristics of micropayment systems such as the use of token or account based platforms as the medium of value exchange. Ease of use, Anonymity, scalability, Validation, security, interoperability, trust, coverage, privacy, pre-paid or post-paid and the range of multicurrency support. Some of the 2nd generation micropayment systems include minitix, Bitpass, Wallie, PaySafe Card, WebCent, MicroMoney and SoftPay.

In Nigeria, online payment has been wrought with several cases of fraud especially with the use of debit cards. Consumers are no longer comfortable with such medium of payment and often ask themselves. If it is worth it to expose private information to consummate transaction on the web for low value transactions. Some people argue that billing for small portions of a product or service reduces the need for security. In this context, security is define here to the ratio of security cost to protected value of the transaction. The security challenges above beg for a new channel to consummate low value transactions. That is radical and innovative enough to provide musicians a platform to sell their music. Software developers their small applications, photographers their pictures and all other content providers a medium that is fast. Convenient and easy to use without the restrictions of the traditional payment systems.

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